Of interest to shareholders and onlookers, revised pipelineIn a recent post, I included this from the January presentation... Slide 5: "
~$78M current pipeline of opportunity". There is also, though, this... Slide 14: "
~$39 million CAD contracted backlog with a ~$209 million USD sales pipeline", which I didn't see at first.
Here is an approved revision...
Slide 14: USD $209 million = total contract value of opportunities actively being pursued
Slide 5: USD $78 million = the sum of the probable value of all of these opportunities
This is the post. It came in three parts with an intro. In a way, it helps to see it all together in light of the higher pipeline number.
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Some notes about the goings-on in 2024 and beyond. Hardly complete, at best highlights. While there are many dates given, this is not in chronological order. Items follow in an associative sequence.
One thing that is absent, almost always absent, is mention of the day-to-day re-signings and small new contracts. There was a nice little mention in December about Jordan Aviation renewing their agreement. They originally signed in 2009.
Airlines come and go. Projects get delayed. Pandemics happen. This makes it hard to complete 5-year contract work. One need only look at the ARJ21 OEM agreement to see how long some things take in the aviation business.
December,
2013...
“AFIRS™ Selected by Datang Mobile Aviation Group for ARJ21 OEM Install” (AFIRS™ 228 real-time data communications and SATCOM solution complete with FLYHTStream.)
The ARJ21 was first imagined in 2002, prototyped in 2007, CAAC STC achieved in 2014, first delivery in 2015, 100
th delivery in 2022, 129 to date.
Sept. 2020, China Express orders 20 AFIRS. June 2022, the first of these 20 was installed.
Things seem to be coming together on many fronts now, though. 2024 should be a good year.
November’s estimate for the contracted
backlog showed an increase to $38 million. (I can’t find a more recent number.) January’s presentation estimate is that there is $78M currently in the pipeline. (See comments above.)
(No idea how the formatting will go until posting.)
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Part One, Weather SpectraSensors WVSS-II acquisition Sept. 20, 2021,
“The WVSS-II product line was purchased by FLYHT from SpectraSensors for $500,000 USD.” “John Schnake, General Manager at SpectraSensors noted, “We are excited to find a good partner in FLYHT where the WVSS product line will continue to provide value to the aviation and weather community. By divesting this product line, SpectraSensors will focus on growing our TDLAS technology in our core Oil & Gas and Chemical industries.” -- -- -- --
Loganair / UK Met. August, 2023, “
The UK’s largest regional airline has joined forces with the national weather service and aviation hardware specialists FLYHT in a project that aims to improve the accuracy of weather forecasts and reduce flight emissions. The innovative partnership is the first of its kind on this scale in the UK and will see all 13 Loganair Embraer 145s fitted with cutting-edge FLYHT-WVSS-II atmospheric water vapour sensors to measure weather data for the Met Office. The sensors will routinely monitor environmental conditions around the aircraft during flight and provide a network of unprecedented scale for gathering invaluable meteorological information via Loganair’s Embraer fleet, which flies three to four times daily across the airline’s unique UK routes.”
Besides Embraer ERJ-145’s, Loganair also has a selection of ATRs, two Britten-Norman Islanders and three Twin Otters.
Total fleet: 35 with 4 on order. If I understand the flange-mount offering, it is mounted overhead and can be used for aircraft with smaller space allocated to avionics. If Loganair finds the SaaS worthwhile, perhaps it will spend the full amount by itself for supplemental installations.
8-year contract, $6.9 million USD.
17 more units to round out the expected full order total of 30 to be installed on a yet-to-be-announced airline.
https://www.loganair.co.uk/our-story/latest-news/2023/loganair-joins-with-the-met-office-and-flyht-to-power-revolutionary-sustainable-aviation-research/ Other meteorological offices of interest that will be approached are in Germany, Australia and Singapore.
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FLYHT and NOAA Collaborate to Improve Weather Forecasting Sept. 12, 2023,
“...today announced that it was awarded, through FLYHT’s wholly owned U.S. subsidiary, FLYHT, Inc. contracts valued at US$500,000, with an additional US$2.8 million in options, by the National Oceanic and Atmospheric Administration (NOAA) to provide its water vapour sensor technology to help the U.S. National Weather Service (NWS) improve weather forecasting and warnings. The agreement is an expansion of FLYHT’s long-standing relationship with NOAA and a recognition of the important role that aircraft-based observations (“ABOs”) play in improving weather forecasting and warning models. The agreement provides NOAA with an initial package of FLYHT-WVSS-II sensors that will be fully integrated with FLYHT’s Certus SatCom and AFIRS Edge multi-channel WQAR for real-time data transmission. In addition to the hardware, FLYHT will provide ABOs throughout flight, including during ascent, descent, and while en route. The initial hardware, funded with FY2023 appropriations, is expected to be installed before the end of summer 2024.” The contract details match up with text in slide 7 of the
January 2024 investor presentation leading me to believe that
WestJet may be taking advantage of the WVSS-II / Iridium Certus / Edge installation arrangement.
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WVSS-II sensor data collection contract... There is an upcoming contract renewal for data collection from WVSS-II sensors aboard roughly 139 Southwest and UPS airplanes that fly primarily over the continental USA. The contract, which includes repair and maintenance, is presently held by Collins Aerospace. It looks to be expiring at the end of August this year. I believe FLYHT has a chance to win this five-year contract.
A recent “Sources Sought” notice and a draft "Statement of Work" updated January 25, 2024 can be found here.
https://sam.gov/opp/fd029d92edd04c1f9d151ed70dc3e371/view. Notice ID ACQ-AONCA0110-24-0029. Scroll down when there to locate the PDF download links, to open and read.
Read about these upcoming contract notices in three previous bullboard posts, starting with...
https://stockhouse.com/companies/bullboard/v.fly/flyht-aerospace-solutions-ltd?postid=35879434 “In store in ‘24 on the weather side of FLYHT’s business”, parts 1, 2, 3.
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Maintenance of existing WVSS-II sensors... Feb. 13, 2024 CEO newsletter.
“...as the FLYHT-WVSS-II production line gets underway in Calgary, FLYHT is well placed to support, upgrade, calibrate and/or replace the 148 legacy sensors which are now nearing end of life. These sensors provide millions of valuable data points every month to NOAA and meteorological agencies around the world by feeding predictive weather systems and improving weather forecasting and it is vital that this key data stream is maintained for the foreseeable future.” Collins Aerospace may own the existing sensors with some in reserve, but FLYHT owns the new ones.
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ECCC contract in Canada, weather data collection, hardware...
FLYHT began working with/for ECCC back in September of 2019. Not that many details have been released, but I understand that the program is successful and the data collection continues. Canada is so big that there is room for a lot of additional sensors, but with a tenth of the population (and budget) Canada probably has limits as to how far it can afford to expand coverage. I would think there would be data sharing going on between Canada and the U.S. since the weather in one greatly affects the weather in the other.
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Synoptic Data Synoptic is an American PBC, a public benefit corporation.
As I understand the arrangement, FLYHT collects the weather data from an airplane along with data from installed sensors (like Tamdar and the WVSS-II). The data gets packaged, though, by Synoptic which in turn delivers it to NOAA.
This statement at the
Synoptic website will need updating to include the WVSS-II.
“As the primary reseller for FLYHT’s TAMDAR and AMDAR-over-AFIRS data as well as FlightAware’s Mode S data, Synoptic is bringing these powerful boundary layer data sets to new users and applications worldwide.” “Aircraft-Based Observations (ABO) data has been shown to be one of the top five most important data sets (measured by impact per observation) for regional and global Numerical Weather Prediction (NWP) models. This conclusion has been clearly demonstrated during the global COVID crisis, during which the decrease in aircraft-based data reduced global NWP accuracy by more than 20% in some analyses. These aircraft data provide tremendously valuable information in the vertical in the form of a sounding - vertical profiles of temperature, wind, and in TAMDAR’s case, moisture.” Should FLYHT submit a proposal for the upcoming WVSS-II contract, it would be under the name of its Colorado-based American subsidiary FLYHT Inc. Should it be a “patriotic” issue for NOAA having a Canadian company handling the data, well, it really wouldn’t be. It is Synoptic. Synoptic might well be handling the data for Collins Aerospace also, just can’t confirm or deny.
Synoptic has a viewer that permits access online. It appears to be an assemblage of weather data collected from all over the world. This must be what weather modelers and their supercomputers have access to.
https://viewer.synopticdata.com/map/data/now/air-temperature#stationdensity=0&map=0.93/-3.4/-68.5 -- -- -- --
AirAsia AirAsia aircraft were outfitted with Tamdar and FlightLink years back, before FLYHT acquired the Tamdar sensor and all that went with it. In late 2018, AirAsia and FLYHT were planning to outfit 190 planes with sensors, SatCOM and services.
CEO Fernandes told media at the Paris Air Show last year: "
AirAsia also expects to have all 204 of its aircraft reactivated by the end of August (2023), and achieve 100% of pre-pandemic capacity in the coming months."
Jan., 2024: “
The low-cost airline group, comprising units in Malaysia, Thailand, Indonesia and the Philippines, carried close to 57 million passengers during the year, recovering to about 77% of pre-pandemic passenger volumes”.
Nothing lately as to where this agreement sits.
https://www.aviationtoday.com/2018/12/13/airasia-flyht-agree-services-190-aircraft/ -- -- -- --
I'll restate my opinion that weather data collection will be a big part of FLYHT’s future, especially if FLYHT expands beyond just Tamdar and WVSS-II revenue and finds ways to capitalize on other weather data sensors and devices and data sources - like the detection of clear air turbulence (CAT).
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FLYHT has something like 115 clients worldwide. These airlines were part of announcements FLYHT made recently. Part Two, Airlines Calgary-based
Canada Jetlines Oct. 4, 2023,
“...AFIRS 228 Iridium SatCom and AFIRS EdgeTM 5G solutions will be installed on Canada Jetlines A320 aircraft, and as part of the collaboration, Canada Jetlines will serve as FLYHT’s A320 Supplemental Type Certificate (STC) partner for the aircraft type.” Nov., 2023, KJ: Canada Jetlines is “
...contracting for a full suite of hardware and recurring SaaS products”.
Canada Jetlines “
is targeting to reach a fleet of 15 aircraft by 2025”. (The STC was received Feb. 16, 2024.)
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Calgary-based
Flair Airlines June 25, 2023,
“...an agreement for the purchase of FLYHT’s innovative hardware and services. FLYHT will enable Flair to closely monitor its fuel and greenhouse gas emissions for every phase of flight operations, including when an aircraft is at the gate, taxiing, at idle, during takeoff and at cruise. The data allows Flair to find opportunities to increase fuel efficiency and reduce the carbon footprint on its fleet of Boeing 737 MAX aircraft”. Q3 2023 (November) Letter to Shareholders, KJ: Flair aircraft will be
“...providing installation access for the Edge” STC process. Nov., 2023 comment, KJ: Flair is “
...contracting for a full suite of hardware and recurring SaaS products”.
There is talk that Flair and Lynx Air will merge, but no details have been made public as yet. Flair has some debt owed to Canada Revenue. Lynx Air was a feeder airline for Frontier Airlines years ago. They are now competitors. Flair fleet size: 20 aircraft. Lynx fleet size: 9 aircraft.
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Calgary-based
WestJet Airlines January 16, 2020, FLYHT secured a US$6.2 million contract with WestJet to install FLYHT’s AFIRS SatCOM. Initially, this was for 160 aircraft.
I understand that Bill Tempany believed in 2022 that WestJet would take the Edge also when it came available. This seems to be proving out.
See “
FLYHT and NOAA Collaborate” in part 1 about how WestJet will be getting the WVSS-II/Certus/Edge package in a contract announced Sept. 2023 with NOAA.
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Swoop Airlines “...was a Canadian ultra low-cost airline owned by WestJet” founded in 2017.
March, 2022, FLYHT and Swoop Partner to Reduce Emissions.
“...FLYHT is partnering with Swoop Airlines to reduce emissions by eliminating non-essential Auxiliary Power Unit (APU) usage.” This project was completed.
Nov., 2023, Calgary Herald... “
Calgary-based Swoop’s five-year experiment ended last weekend when WestJet, the company’s owner, announced it had absorbed the airline’s fleet into its own.” Not terrible news for FLYHT as Swoop aircraft are now WestJet and will likely get AFIRS SatCOM (and the Edge) now, too.
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SunWing Airlines Founded in 2005, SunWing began as a tour operator flying from Canada to popular holiday destinations in the Caribbean, Mexico and Central America. It was soon flying out of numerous American cities. SunWing grew to have a fleet of 13 Boeing 737-800’s and 9 737 Max 8’s.
WestJet acquired SunWing in May, 2023. Just four months later, that subsidiary SunWing would be absorbed into WestJet.
“The WestJet Group today shared its targeted timeline for the integration of Sunwing Airlines into WestJet Airlines to complete the airline’s strategy to move all 737s into the same AOC (air operator certificate). Planning and integration activities are well underway, with the goal of completing integration efforts by October 2024.” In the same way that what happens to WestJet aircraft is expected to happen to Swoop aircraft, absorbing SunWing will just mean that many more more installations of FLYHT product.
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Denver-based
Frontier Airlines Dec. 7, 2021, ...for its near-term deliveries. SatCOM and SaaS. (Opportunity for growth with a fleet size of 144.)
Frontier to
“equip near-term deliveries of A320 and A321 aircraft with FLYHT’s AFIRS solution, enabling Frontier to optimize its over water routes. By gaining access to real-time fleet information through FLYHT’s solutions, Frontier aims to improve operational efficiencies in both flight and ground operations, including reducing flying time and the associated fuel burn, while enhancing customer satisfaction.” In 2022, Frontier bid on merging with Spirit Airlines. JetBlue offered more.
Jan., 2024, “
A federal judge in Boston ruled to block the $3.8 billion proposed deal after agreeing with the U.S. Department of Justice that it was anticompetitive and would harm consumers”.
Spirit is working to stave off bankruptcy, hasn’t given up on the JetBlue merger just yet.
Will Frontier return to the table?
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Air North, Yukon’s Airline
Oct 31, 2023, “
FLYHT to Provide 5G & Iridium Connectivity Solutions to Air North, Yukon’s Airline to Enhance Communications and Operations.”
Lengthy description of the hardware (both AFIRS SatCOM and the Edge) and services at this link.
https://flyht.com/investors/news-and-media/view/flyht-to-provide-5g-iridium-connectivity-solutions-to-air-north-yukons-airline-to-enhance-communications-and-operations/ Air North has a small fleet of four ATRs and seven Boeing 737s.
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China Express / ARJ21 OEM Sept. 9, 2020,
“...to Factory Install AFIRS on ARJ 21 Aircraft and Announces China Express as a Launch Partner for its Actionable Intelligence Solution”.
“...20 AFIRS units ... will be factory installed on the ARJ21 aircraft for China Express Airlines Co. Ltd., China’s first private regional airline. China Express will take delivery of the first 20 of an expected commitment for up to 100 of the newest aircraft type available in China over the next 5 years”. March 11, 2021,
“After more than a year of product development and collaboration with operators, Flyht is poised to move its revamped suite of real-time data analysis tools into line operations with launch customers China Express, LIAT, and Swoop”, CEO Bill Tempany said.
Wikipedia note:
“LIAT ceased operations on 24 January 2024.” See WestJet for details about Swoop.
AFIRS was to be factory-installed on the ARJ21 from early on, there was just no production. I expect that AFIRS is still available OEM today.
Q:
“How many ARJ21 are there? A: There are 113 Comac ARJ21 aircraft in active service as of September 2023. Currently, the largest operator is Chengdu Airlines with 25 aircraft.” For a list of airlines with active ARJ21 aircraft, try Wikipedia’s
List of Comac ARJ21 operators.
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Comac C919 OEM October 28, 2021, AFIRS to be factory-installed on Comac’s C919.
“...announced that it has signed a multi-year contract with Commercial Aircraft Corporation of China, Ltd. (“COMAC”) for the installation of AFIRS 228 on the COMAC C-919 aircraft, and has received an initial purchase order.” The good news is... Wikipedia: “
By January 2023, COMAC reported having received more than 1,200 orders and aimed to expand its annual production capacity to 150 airliners in five years.”
The bad is... Deliveries (to China Eastern Airlines), just 1 in 2022, 2 in 2023, 1 in 2024. Total: 4 in service.
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Another two of the smaller contracts we don’t hear enough about...
Sichaun and Bahamasair May 2025
“FLYHT today announced two new commercial agreements with Sichuan Airlines, the largest airline in Western China, and Bahamasair, the national airline of the Bahamas, for satcom hardware and recurring software services. The combined value of the two contracts is approximately $1.2 million in revenue over the next five years. Sichuan Airlines, a long-standing FLYHT customer, has agreed to purchase 10 additional AFIRS 228 units for installation on its fleet of Airbus A320 aircraft that it is converting from passenger to cargo in order to service the growing demand for freight services in China. FLYHT was awarded the contract after a competitive bidding process that included the incumbent satcom provider. Bahamasair has re-engaged with FLYHT after pausing during the pandemic, re-activating three ATR aircraft with the full suite of SaaS services including voice, aircraft situational display (ASD) and health monitoring. The multi-year contract anticipates the installation of AFIRS 228 hardware units and related software services for additional ATR aircraft over the term of the contract.”
-- -- -- -- STCs, licensing, MBS, SITA...
Re: STCs for Airbus A320 family (with Canada Jetlines)
and for the Boeing Max (with Flair Airlines).
Q3 2023 (November) Letter to Shareholders, KJ:
“Initial hardware production runs of the AFIRS Edge have been completed, and following STC approvals we will begin installations on our customers’ schedules”. Airbus A320 family: Transport Canada STC approval date February 16, 2024.
Boeing Max family: Transport Canada STC approval date _______________.
| STC Chart: AFIRS Edge | | | |
| | | | | | |
| TCCA | FAA | EASA | UK | CAAC | Aircraft Type |
| Canada | USA | EU | CAA | China | |
| A | | | | | Airbus A319, A320, A321, NEO |
| P | | | | | Boeing B737-600, -700, -800 (Flair) |
| P | | | | | Boeing B737-MAX 8 (Flair) |
| | | | I | | Embraer ERJ-145 (Loganair) |
| | | | | | |
| | | | | | |
| STC Chart: FLYHT-WVSS-II | | | |
| | | | | | |
| TCCA | FAA | EASA | UK | CAAC | Aircraft Type |
| Canada | USA | EU | CAA | China | |
| I | | | | | Boeing B737-600, -700, -800 (WestJet?) |
| | | | I | | Embraer ERJ-145 (Loganair) |
| | | | | | |
Chart Legend: A = Approved, P = Pending (Provisions STC has been received; in final stages before receiving a full STC), I = In Progress .
At this link, slide 9 in the January 2024 investor presentation, there is a nice graphic showing the “Schedule for Committed STCs”. The time period shown is from Q4 2023 to Q1 2025 inclusive.
https://flyht.com/wp-content/uploads/2024/01/FLYHT-2024-January-Presentation.pdf The Transport Canada STC for the 4MCU model Edge+ on an Airbus looks like Q3. This would be the form factor for the Teledyne WQAR 30-minute swap out that KJ says is gaining interest from Tier One airlines for updating legacy fleets to 5G.
With "familiarization", the STCs in other jurisdictions could be attained in 6 to 8 weeks following each version.
I think part of the slowness in attaining this first STC may have been due to progressive re-design. A look at pictures of the 4MCU form factor over time notably show evolution.
For weather applications, the AFIRS Edge, the WVSS-II relative humidity sensor, and the Iridium Certus-100 get installed as a set. Interim CEO KJ (Q3 2023 letter to shareholders):
“Our strategic approach to engage directly with the government agencies has not only provided the means to secure these contracts, but it also provides our partner airlines the opportunity to benefit from significantly reduced capital costs for their AFIRS Edge and SatCOM connectivity.” KJ:
"...following STC approvals we will begin installations on our customers’ schedules. With both Flair Airlines and Canada Jetlines contracting for a full suite of hardware and recurring SaaS products, we are excited to have our customers using the ClearPort, FuelSense, and GateWay applications." -- -- -- --
Licensing FLYHT has yet to announce any license sales of AFIRS 228S SatCOM for OEM installation on Airbus aircraft since the orders L3H placed last year.
From memory only, licensing has been averaging up to $3M USD annually since about 2014. 2022 was an exception as L3H rectified a supply chain issue by buying more than twice the usual. A dip in 2023 may have been an adjustment. License sales in 2023 totaled about $2M CDN. In 2022, they totaled about $9M CDN. Orders are typically received in H1.
Sales margin is typically 85% or higher.
“
Licensing includes sales of modems with a related manufacturing license fee.”
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FLYHT’s wholly-owned subsidiary
CrossConsense Feb. 13, 2024, CEO update...
“Looking ahead, CrossConsense plans to roll-out several exciting new extensions to their app offerings this year. Many all-new features will make it into their popular solution Aircraft Fleet View, which is already in use with more than 3000 users. These customer-driven developments focus on communication and collaboration within the aviation space. The goal is to replace the need for unofficial communication channels like WhatsApp. The team already has multiple new customers lined-up, who are actively participating in feature development.”
Well-run operation. Nothing announced yet that I can recall as being what might be thought of as a crossover sale – i.e. CrossConsense SaaS product with FLYHT hardware, or FLYHT hardware to an existing CrossConsense client.
A case study of theirs, including screen images from
Aircraft Fleet View, graphs and text can be found at this link...
https://flyht.com/wp-content/uploads/2024/02/Condor-Case-Study-on-AFV-in-Aircraft-IT-Ops-V12.4_20240117.pdf -- -- -- --
FLYHT Partners with MBS May 3, 2022
“FLYHT today announced a cooperation with MBS Electronic Systems GmbH (“MBS”), a leading provider of secure data loading solutions that enable compliant avionics software maintenance and safer flight operations. The two companies have collaborated to develop a secure wireless avionics software and onboard data loading solution with the goal of enabling customers to fully comply with new security requirements.” KJ: “This partnership with MBS enables us to combine our AFIRS Edge platform, an advanced secure avionics data repository, with an advanced avionics data loader capability provided by the experts at MBS. Together, this creates a streamlined, secure solution for airlines to utilize, complying with secure data requirements and improving operating efficiency.” Added Dr. Charles Nicholls, Technical Director at MBS,
“As a leader in the secure portable data loader field, we have seen increased demand from airlines for an onboard solution that meets the guidance of ARINC 645-1. Together with FLYHT, we can service this growing need among the airlines.” Added Willie Cecil, Sales Director at FLYHT,
“Both companies’ technologies are so mature that an initial prototype solution was developed and will be demonstrated in Memphis. We are excited by airline interest in our solution, and we plan to qualify and certify the solution within the next six months.” “
FLYHT and MBS plan to showcase the new solution to airlines at the annual Aviation Maintenance Conference in Memphis on May 10-12, 2022. This collaboration offers the opportunity to evaluate the strength of a combined solution, with the intention to solidify a financial arrangement following the Memphis event.” No word on this since. Edge certification may be a prerequisite.
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FLYHT Partners with SITA Feb. 2, 2022
“...FLYHT today announced that it has signed a reseller agreement with SITA for its AIRCOM® Cockpit Services, initially focusing on developing the market for Iridium Certus. This relationship will benefit both parties by aligning sales endeavors and enables FLYHT to provide additional inflight satellite internet connectivity to AFIRS Edge customers.” “SITA, the leading IT provider to the air transport industry, last year integrated the Iridium Certus® satellite communication service into its AIRCOM® Cockpit Services portfolio, which provides critical communications for aircraft operations and Air Navigation Service Provider customers globally, and supports more than 18,000 aircraft in their daily operations. Iridium Certus enables a dedicated native IP connection to the cockpit with global coverage and increased security via authentication and virtual private networking.” Not clear what the opportunity is here aside from being a SITA reseller to get a foot in the door.