Another game-changing initiative of Flyht’s that is coming to fruition is in China. The developments in China have been dramatic, with the Civil Aviation Administration of China (CAAC) firming up the timelines for their satcom mandate first published in October 2012:
From the link above: "According to the plan, Chinese airline companies should install the [satcom] system on 20% of its fleet by the end of 2013. And by the end of 2016, all commercial aircraft should have such equipment." We now know that the CAAC has reaffirmed the 2016 deadline for full-fleet installation, and has imposed a deadline of November 30 2013 for the airlines to have their roll-out plans submitted to CAAC, with installations mandated to begin in early 2014. One of many good things from a Flyht perspective is that for installations to begin in early 2014, a PO will have to be issued to Flyht well before the end of 2013. By the end of 2016, China’s commercial fleet will have over 1,900 aircraft that will be mandated to have satcom equipment on board.
Encouragingly, six of the major Chinese airlines have already done initial installations, and are setting up procedures for pilot training and large scale installations in 2014. I am hoping to see the first large PO from China in late Q3 or Q4 of this year. Of course, one of the many positive knock-on effects of the China mandate is that many OEMs will likely be forced to accommodate installation of the Iridium/AFIRS system, both on the assembly line and in the after-market. Bombardier was forced into assembly line installations in 2012, as per the following press release:
It would be reasonable to expect that other OEMs (such as Boeing, Embraer and Dassault) will be forced to likewise accommodate installations of the Iridium/AFIRS system for the Chinese market, and maybe-just maybe-this forced adoption will end up convincing them of the merits of the system so that they end up being proponents and willing adopters-like Airbus. On the NetJets front, Flyht management indicated at the May 7 AGM that the interruption caused by the bankruptcy of Hawker Beech is finally over: the first jet in the NetJets Europe fleet went live on May 6, and now all 10 of the installed units are live. Although the Hawker Beech bankruptcy has changed the trajectory of the adoption process, with many customers' own evaluations showing that Flyht's AFIRS system demonstrates savings of over $100,000/plane/year, I would expect to see this program gain momentum, both at NetJets Europe and NetJets USA, over the next two years.
A smaller but still significant and very visible opportunity is in Nigeria: a mandate to have AFIRS installed on all planes operated by Nigerian airlines means that another 80 planes will have the AFIRS system installed and running by the end of 2014.
Developments such as these above, as well as developments with operators of C-130 fleets have reinforced my confidence that we will see Flyht's stock somewhere in the $1$3 range within 3 years; shorter-term, I think we've got a good shot at the $0.40-$0.60 range by yearend.
Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the author's only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.