Where Go Airplane Sales, So Goes IFEC Sales!

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There is a big deal at this year’s Farnborough Air Show and it relates to future airplane sales over the next few years. Quite frankly, the future predictions (and the manufacturing upgrades in progress), as well as, both Airbus and Boeing are frankly bigger than they have ever been. Recently Airbus announced that they are delivering some 52 A320 family airplanes and their orders through July 4th total some 471 jets so far. As a whole, the industry has a giant backlog of over 12,000 aircraft. Last year’s Paris Show netted some 750+ planes valued at over $100 Billion, but the other biennial show at Farnborough just might be different this year as airline executive’s appear to be nervous about the short term market. Brexit, cold war escalation, and terrorism are now clouding the travel market, and where goes travel, so goes new airplane sales… and so goes IFEC sales as well, both on line-fit and retrofit. Further, one travel reporter noted: “International air travel demand increased 4.3 percent year over year in May, down from 5 percent growth in April. May was the third consecutive month that demand growth decreased. Airline load factors were down in every region except Latin America, where demand and capacity growth were in equilibrium.” Also, check out this Accenture report on the market and the conditions affecting it or this one: Boeing And Airbus: The Order Battle In June 2016 and finally, the other side of the fence: Planemakers shrug off economy worries as travel demand grows | Reuters

Sales of new planes have been sluggish in the business sector and this week’s Farnborough should be somewhat telltale for new planes in that market as well. As noted above, so far in 2016 the numbers don’t look like those of 2014. If we look at the general aviation market, for example, at the end of 2014 plane shipments were up some 4.3 percent, but in 2015 shipments were down one half percent. Also noting that in 2007 at the peak of the market, the GenAv manufacturers produced over 4000 planes; and today, that market is closer to 2331 aircraft.

We should also mention that the price of GenAv planes almost doubled (on average) after 2007 because of the lower numbers being produced. We wonder if the GenAv plane number trends will start showing up in the commercial market this year? One aviation expert in the financial industry expects this year’s new commercial aircraft orders to be in the 500 – 600 range at Farnborough instead of the 700+ as in last couple years. The economy and the other aforementioned factors, may be the perfect storm… not to mention the entry of Chinese and Russian new commercial planes (By the way, what IFEC do they choose?), just may have an impression on the world markets and maybe, just maybe, if Farnborough is down, the market may be shifting and some of the planes (and engine) manufacturers might get a bit of breathing room. But don’t kid yourself, this potential reduction in demand will affect IFEC and it may cause many changes… and many say these changes have already begun! If sales are truly down we expect the loss of, and/or combining of, some of the players in our industry – Stay Tuned on this one.

This week’s Farnborough sales will have some indications as to where we will be heading in the way of total industry revenues, at least in the near term. However, if you include the IFEC impacts as a result of passengers carrying more and better portable devices, both may have an influence on IFEC sales and installations. However, the market for connectivity, which seems to demand higher and higher speeds, will surely keep up and maybe even increase. The issue here is price and we are waiting for new technology and better bandwidth to help out. Whatever the outcome, it looks like Farnborough may be a big indicator that our industry needs to watch very carefully.

We Note: Even as the company considers potential new planes and new variants of others to be as competitive as it can be, Muilenburg made it clear that meeting those increases are vital to helping it make good on the demands created by being in the “unprecedented position of (having) about 5,700 aircraft in backlog.” The increase will come in the narrow-body segment — which makes up the vast majority of that backlog — where Boeing plans to boost output of its 737, including the new Max variants, from the current rate of 42 planes a month to 47 a month in 2017. A new midsize Boeing jet could be on the way – Wichita Business Journal

Airbus Group – Farnborough International Airshow
Boeing: Boeing: Farnborough Air Show 2016


MORE NEWS

LHS1:
Lufthansa launches Internet connectivity on short- and medium-haul flights
Green light from EASA: Supplemental Type Certificate issued
In October of this year, the first Lufthansa short- and medium-haul aircraft will take off with broadband Internet on board. Lufthansa’s entire A320 family fleet is expected to have the innovative technology installed by mid-2018. One key milestone has already been reached: Lufthansa Technik is the first MRO company in Europe to have received the Supplemental Type Certificate (STC) from EASA to install a Ka-band antenna on the A320 family, i.e. the A319, A320, and A321 models. The STC serves to verify that the modifications to the aircraft (hardware or software) conform to the design specifications stipulated by EASA. Said specifications ensure aircraft’s continued airworthiness.
The first aircraft was equipped with the technology in June. In the coming weeks, the onboard system will be tested for functionality and stability. Lufthansa passengers will likely be able to use the new internet service from October. Other airlines in the Lufthansa Group will follow at a later date.
The future service from Lufthansa and its technology partner Inmarsat is based on the latest broadband satellite technology (Ka-band) and offers seamless, reliable coverage on short- and medium-haul flights through Inmarsat’s Global Xpress network. Passengers will be able to access the Internet using their own mobile devices via Wi-Fi. In addition to basic surfing and email, other more sophisticated applications will be possible, including video streaming. At a later date passengers will be able to use their cellphones for SMS and data transfer via their own mobile accounts.
Lufthansa Technik is responsible for installing all systems and components as well as for the works required to comply with aeronautical and statutory regulations. In Europe, this was the first successful installation involving the GX communications network and the Honeywell-designed Ka-band antenna. To install the system, electrical and structural modifications were required both inside and outside the aircraft cabin. All modifications were developed and approved by Lufthansa Technik’s licensed development unit. The installed components were integrated in the cabin infrastructure in such a way that they are virtually invisible for passengers and easy to operate by the cabin crew. The work can be completed in up to four days or during regular maintenance layovers.
Lufthansa Systems and Lufthansa Technik have also established a long-term partnership with global satellite operator Inmarsat in order to offer a modern, multifunctional onboard IT platform with broadband internet access to the market. Both the Lufthansa Group as well as airlines around the world will benefit from this strong partnership through comprehensive services.
Lufthansa carried out the world’s first scheduled flight with broadband internet access on January 15, 2003. Despite its growing popularity among passengers, the technically reliable service had to be discontinued in 2006 because the Connexion by Boeing satellites ceased commercial operations. Since December 2010 Lufthansa has once again been the first airline to provide broadband internet access on intercontinental flights. Since June 2015 FlyNet has been available on all 107 long-haul aircraft in the Lufthansa fleet. Lufthansa operates the world’s largest internet-connected long-haul fleet.

Lufthansa System Graphic

ROCKWELL:
Shenzhen Airlines has selected Rockwell Collins’ full suite of advanced avionics and PAVES Broadcast overhead in-flight entertainment on 44 737 aircraft comprised of 37 737MAX and seven 737NG. Deliveries of the aircraft are expected to begin in July 2017. Among the Rockwell Collins avionics selected by Shenzhen include its MultiScan ThreatTrack weather radar, GLU-2100 Multi-Mode Receiver and TTR-2100 next-generation Traffic Alert and Collision Avoidance traffic computer. “Commercial air traffic will continue to increase in the Asia-Pacific region and having advanced systems that Shenzhen can count on for more efficient flight, weather threat detection, precision navigation and aircraft avoidance will be essential,” said Jim Walker, vice-president and managing director, Asia-Pacific for Rockwell Collins.


OTHER NOTEWORTHY NEWS

802.11ah:
The new Wi-Fi frequency standard (‘HaLow’) may be the solution to more range at less power for inflight applications. With double the range of existing antennas, it may be a solution inside long metal fuselages, that is, if it doesn’t interfere with any aviation systems that exist today. Approved with an eye for IoT Wi-Fi solutions, it may find a home on a future plane or at the airport.

PDT:
The folks at PDT did a great job in finding new tech trends at the Aircraft Interiors and if you have not read it, you might check it out here: Aircraft Interiors Expo 2016 Trends | Product Development Technologies

POWER:
If your future cell phone runs out of power on a flight, there may be a “solution”. Check out this link!

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