When I look through the March presentation, I see some big numbers projected for FLYHT SaaS. How real are these year end numbers?
The numbers are based on $6,000 to $8,400 annual SaaS ($500 to $700 monthly) from a typical installation per slide 11. (USD stated.) I wondered if I could find examples of these amounts. I found two relatively recent contracts to look at for which there is no hardware component mentioned.
One is the December 2023 contract with Jordan Aviation. A mix of eleven Airbus and Boeing aircraft, 5-year contract, SaaS only (since this is a renewal). USD $583,000.
The other contract is a bit older, December, 2020, when RAVN Alaska came back from bankruptcy with a new owner and an abbreviated list of destinations. RAVN has nine Dash-8’s, smaller aircraft, of the original aircraft type that AFIRS was first installed on. 5-year contract, SaaS only, USD $300,000. Full AFIRS™ services.
The
Jordan Aviation contract works out to be USD $883 (per month, per plane). USD $583,000 ÷ 60 months ÷ 11 planes = USD $883.
The
RAVN Alaska contract works out to be USD $556 (per month, per plane). USD $300,000 ÷ 60 months ÷ 9 planes = USD $556.
The lesser amount of the monthly RAVN SaaS could be explained in two ways - by lower rates for older SaaS and by the Dash-8 being perhaps a less involved installation with less data to transmit. The planes’ average age is around 30 years, after all.
Compared to management estimates, the Jordan Airlines contract is well above the high estimate, and the RAVN Alaska contract is above the low. This is a very small sample, of course, and FLYHT would have the full data set to derive their numbers from.
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I should add that the cost per plane per flight is incredibly low.
Jordan Airlines is paying $29.03 on average per day for services. $883 x 12 ÷ 365 = $29.03. If their flying is regional, they may make 4 to 5 flights per day. Per flight, this would be $6.45.
RAVN is paying $18.26 on average per day. I expected that their flying is regional, almost local (it has been described as “rural”), and it seems they fly more frequently each day. Even so, say they average 5 flights per day per plane. Per flight, that’s $3.65.
(At first, I couldn’t find their flights at flightradar24.com, but if the call letters from planespotters.net are used the flights can be found. N880EA, N883EA, N884EA, N885EA, N887EA, N889EA, N891EA, N892EA, N151RA. Some flights are just 30-minute hops.)
Using the base $6,000 per year per plane SaaS estimate from slide 11, a typical daily rate would be $6,000 ÷ 365 or $16.44 per day.
This is so inexpensive that, at first, you have to wonder if the numbers and calculations are right. Then you have to wonder why any airline wouldn't renew (and so it seems, with a 95% retention rate, airline bankruptcies the probable exception).
There would be the cost of hardware to amortize over the life of the installation (estimated at 20 years). While AFIRS has reportedly cost up to $100K per installation (very early on, 10 years ago, not so now), the Edge 5G hardware package is now costing about $30K per plane to install according to slide 5 in the March presentation. $30,000 ÷ 360 months = $83 per month for 20 years.
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$500 monthly for SaaS plus $83 monthly for amortized hardware. Per plane. Can FLYHT's SaaS save an airline more than that per month such that the installation pays for itself?
If an installation could save an airline $1,000 per month per plane, roughly $400 per month could go towards the cost of hardware installation. At $400 a month, $30,000 could be paid back in just over 6 years.
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Noteworthy, the Edge 5G hardware package does far more than just offer the ability to run cost-saving FLYHT SaaS. The additional abilities and capabilities have value all their own.
Learn about it here.
https://flyht.com/airborne-hardware/afirs-edge/ Video here.
https://www.youtube.com/watch?v=8QwzQFnk5dA Feel free to comment, and point out any factual or calculation errors.