FLYHT Aerospace Solutions Ltd V.FLY

RE:On the Edge

[RayDonovan78]

More NOISE !!

CF105 wrote:  As we near the end of September and the end of Q3, we await an announcement about the certification of the Edge device by Transport Canada. As I understand it, certification by TC can facilitate the certification process in the U.S. and elsewhere in the world. Announcements about sales which depend on the Edge receiving certification really cannot be expected until this happens.
 
Notable details about progress go back to August. 

From Flyht's August presentation...
 
“Launch customers identified for Edge device* (Airbus A320-Coral Jet announced) with other aircraft type announcements imminent”.
 
 
From Flyht's August presentation...
 
Edge Opportunity 

• Right product, right time

• Addressable market is large:
  – SITA installed base - 18,000 aircraft, 400+ airline customers
  – Total addressable market (TAM) – 25,000 aircraft
  – Since FLYHT is partnered with SITA we expect to win more than 20% penetration:

• ~$170m hardware, ~$13.5m p.a. SaaS (starting point for SaaS-related upsales)

• SaaS revenues would be over life of plane ~20years
  – Context: FLYHT currently has a market cap of $23m

• Sales channel is deep, currently working on multiple RFPs:
  – Partnered with SITA, the leading IT provider to the global air transport industry
  – Joint marketing with AWS as a Qualified Amazon Web Services Travel and Hospitality Competency Partner, AWS is a premier cloud service provider to the airline industry
  – MBS partnership - MBS Electronic Systems GmbH (MBS) for data loading solutions that enables avionics
  software maintenance (MBS is a leader in the portable data loader market)

• Expanded Edge base = Actionable Intelligence upsell opportunity

 
From the August Q2 CEO Letter to Shareholders...
 
“The AFIRS Edge has become FLYHT’s biggest opportunity in 20 years. We have received the first manufactured AFIRS Edge units from our supplier and they are currently undergoing the final testing and certification steps.
 
Development on the A320 and B737 Supplemental Type Certificates (STC’s) is well underway. The most exciting and rewarding time in the two years since my return was in late June when the team of hardware, software, ground software, product owners and sales staff spent three days huddled in the office with a manufactured Edge 1.0, an MBS setup, iPad, PC and power supply. The team trained staff on the functions of the end-to-end products for WQAR and Remote Avionics Data loading from source, to Edge, to ground and certified for use. We then packaged up the units and delivered them to Japan and Indonesia for demonstrations to 15 airlines.”
 
 
Bruce Krugel in the KRC report released in August refers to the “Announcement of Edge device STCs (and) initial Edge device contract(s) as “upcoming catalysts”.
 
BK: “We continue to believe that this device, subject to Supplemental Type Certificates (STC) certification, will be a company maker for FLYHT. Refer to Appendix I: AFIRS Edge for more detail on this product. Development for the A320 (via Coral Jet1) and a Calgary-based airline for the B737 is undergoing final testing and certification with first run Edge devices. We believe that the first implementation of the Edge, through Coral Jet, will be completed by the end of Q3/October. FLYHT has launch customers for at least 4 aircraft types. Additionally, FLYHT has demonstrated the units in Japan and Indonesia to 15 airlines.”
 
From KRC’s Appendix I: “(The Edge) is expected to be available to FLYHT customers in late 2022.”
 
 
The most recent word, September 15, 2022, is in the analyst report from Oak Ridge Financial...
 
Page 1: “FLYHT’s next generation Edge product is designed for 5G but also supports 3G/4G/LTE. At play, there are over 20,000 aircraft that will need an upgrade path, which represents an addressable market of ~$1.0B.”
 
Page 7: “Management has described the AFIRS Edge as its biggest opportunity in 20 years, with a total addressable market of approximately 25,000 aircraft. The majority of this wQAR market is owned by Teledyne (TDY – not rated) and it appears they are only offering a 4G/LTE migration path. The interesting dynamic for FLYHT will be the decision-making process for larger carriers and incumbent customers. Will carriers choose the 4G/LTE upgrade fix from the incumbent or move to only next generation 5G solution, that would also have 4G capability, from FLYHT.
 
As this business is largely relationship driven, the recent hiring of several TDY sales professionals by FLYHT presents an interesting dynamic. Combined with its partnership with SITA and other industry cloud and data loading solutions providers, FLYHT’s global reach has increased considerably, something it has not enjoyed in its history.”
 
Page 7: “FLYHT is working on aircraft certification for the Edge with Coral Jet on the A320, with the expectation that approvals and installations can happen yet this year.”
 
 
A place to look for information on certifications is the Transport Canada website, although I don’t know how current the public record is.
 
For general information https://tc.canada.ca/en/aviation/aircraft-airworthiness/aircraft-certification, and for searches https://wwwapps.tc.gc.ca/Saf-Sec-Sur/2/nico-celn/c_s.aspx?lang=eng.