Rockwell/UTC, Gogo, and more!

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This is HOTand unannounced!

We hear that United Technologies Corp has submitted an offer to acquire aircraft component maker Rockwell Collins Inc.. It is IFExpress’ understanding that Rockwell Collins is in the process of reviewing the offer, but we don’t know the outcome of said review. Bloomberg News reported earlier that United Technologies was “weighing” a potential acquisition of Rockwell Collins but said it was unclear whether the two companies were currently in talks. Clearly, this potential acquisition could have a major impact within the industry, but we wondered what is driving this impending marriage? If the deal does go through, the combination would meld together the largest aircraft parts manufacturer with the fourth-largest aircraft parts manufacturer; as well as, being among the largest deals in the industry as RC has a market cap of $19+ billion, while United Technologies has a market cap of $97 billion.  Neither company has commented on the potential of a deal being reached. We do know, in the past, UTC was looking at Honeywell, probably for similar product broadening reasons. Further, an issue could emerge from the likes of leading aircraft OEMs Airbus and Boeing, major customers of both companies. Likely, the attraction is related to their product lines which do not overlap. Industry folks are watching this possible hook-up because if it happens, others will follow. If you have Rockwell stock, you might want to look for increases. Stay Tuned!

Gogo

Gogo, provider of broadband connectivity products and services for aviation, announced its financial results for the quarter ended June 30, 2017and here they are:

Second Quarter 2017 Consolidated Financial Results

  • Revenue increased to $172.8 million, up 17% from Q2 2016. Service revenue increased to $154.1 million, up 21% from Q2 2016, on a 9% increase in commercial aircraft online to 3,109, a 17% increase in ATG business aircraft online to 4,453, and increased customer usage across all segments.
  • Net loss increased to $44.2 million, a 10% increase from Q2 2016, and Adjusted EBITDA(1) decreased to $9.9 million, down 31% from Q2 2016. Both net loss and Adjusted EBITDA in Q2 2017 included $14.0 million in increased costs related to the launch of 2Ku service for new and existing airline partners, OEM 2Ku programs, and costs associated with the development of Gogo’s next generation ATG solution.
  • Capital expenditures increased to $74.1 million from $47.6 million in Q2 2016. Cash CapEx(1)increased to $65.6 million from $39.8 million in Q2 2016 due to an increase in success-based airborne equipment purchases in advance of heavy 2Ku installations in the second half of 2017.

“We launched 2Ku service on five new airlines in the quarter and are on plan to meet our targeted increase in installations during the second half of the year,” said Michael Small, Gogo’s President and CEO. “While these installs require up-front investment, they will all produce positive returns in the future.” Further, “Our planned increase in investments in the second quarter lay the foundation for future growth in revenue and profitability,” said Barry Rowan, Gogo’s Executive Vice President and CFO. “We expect Adjusted EBITDA to increase substantially in the second half of 2017 and into 2018, and we are on track to generate positive free cash flow in 2019.”

Airbus

Airbus logged orders for four jetliners from its A330 and A350 XWB widebody families in July, while delivering 47 aircraft from across its current-production single-aisle and widebody product lines during the month. The new business in July involved three A330-200s for International Airlines Group, along with one A350-1000 for an undisclosed customer. Taking these transactions into account, along with conversions and cancellations, Airbus’ overall net orders for the first seven months of 2017 totalled 205 jetliners. July’s deliveries involved 36 A320 Family aircraft (including nine A320neo versions), four A330-300s, six A350-900s and one A380. As part of this activity, Airbus reached the 100th A350 XWB delivery milestone with its handover of an A350-900 version for China Airlines, while the first A350 XWB for Delta Air Lines (also an A350-900) was provided to this U.S.-based carrier.  During July, Russia’s S7 Airlines received its initial A320neo (on lease from BOC Aviation), while Air Côte d’Ivoire received its first A320

With the latest orders and deliveries activity, Airbus’ overall backlog of jetliners to be delivered stood at 6,726 as of July 31, representing approximately nine years of production at current rates.

Boeing

  • Boeing and the Japan Aerospace Exploration Agency (JAXA) will flight-test Long-range Light Detection and Ranging (LIDAR) technology next year. This remote-sensing technology could help commercial airplane pilots better detect and avoid weather disturbances to improve flight safety. They have been collaborating on the integration of LIDAR technology into a commercial airplane platform since 2010. The JAXA LIDAR technology offers the potential to accurately measure winds as much as 17.5 kilometers in front of airplanes and provide pilots with sufficient time to take appropriate action to avoid wind shear and clear air turbulence, which does not have any visual cues such as clouds. Since 2012, the ecoDemonstrator program has used a series of flying test-beds to develop and test aviation technologies that enhance safety and environmental performance. The Boeing ecoDemonstrator program plays a key role in the company’s environmental strategy by using flight testing to accelerate new technologies that can reduce emissions and noise, improve airlines’ gate-to-gate efficiency and help meet other environmental goals.
  • Next, Boeing and and BOC Aviation Limited have finalized a deal for 10 737 MAX 10 airplanes. The announcement, first made at the 2017 Paris Air Show, is valued at approximately $1.25 billion at list prices. BOC Aviation joined 15 other companies for the launch of newest version of the 737 MAX family during the Paris Air Show. The Singapore-based lessor has committed to more than 300 Boeing aircraft since its establishment.
  • Boeing (NYSE: BA) and Air Lease Corporation (NYSE: AL) have finalized an order for 12 737 MAXs first announced at the 2017 Paris Air Show. The agreement also includes two new orders for the 787-9 Dreamliner. The deal includes five 737 MAX 7s and seven 737 MAX 8s, bringing ALC’s total MAX orders to 130. The leasing company has now ordered a total of 49 Dreamliners. The 787-9 will provide ALC’s airline customers with long-range performance capabilities and excellent operating economics.

Eclipse

On Aug. 21, a total solar eclipse will darken the skies across the entire United States for about three minutes. The last time this occurred was in 1918! Now the folks at Southwest are offering inflight viewing, we guess? In a press statement, the airline company identified the flights that will have the best track for viewing the solar eclipse. Buy a ticket for a flight and receive special viewing glasses and themed Cosmic Cocktails. While we are not sure about the pricing –  Here are the flights:

  • Southwest 1375 from Seattle-Tacoma to St. Louis
  • Southwest 1368 from Portland to St. Louis
  • Southwest 1577 from Denver to St. Louis
  • Southwest 301 from Denver to Nashville
  • Southwest 1969 from Denver to Atlanta

We understand the Southwest team is making a “event” out of it and plan the best viewing, but if you are curious about seating and visibility, so are we?

Lufthansa Systems

Smooth flight operations are a top priority for airlines. Long delays or cancellations can result in high costs and damage to an airline’s image. Since pilots can not take off without navigation maps, backup solutions are essential to flight operations in case of a system failure. With its new cloud-based Lido/RouteManual Backup solution, Lufthansa Systems is offering a reliable and flexible online service as a digital backup for its electronic navigation maps. Despite the popular trend towards a paperless flight deck, many airlines are still using paper maps as backup copies. But this negates some of the advantages of digital solutions because the paper maps still have to be printed out, picked up and carried onto the aircraft.  Despite the popular trend towards a paperless flight deck, many airlines are still using paper maps as backup copies. But this negates some of the advantages of digital solutions because the paper maps still have to be printed out, picked up and carried onto the aircraft. The online platform includes the same worldwide data as the map solution, and customer-specific information can be integrated as well. The backup system runs on Microsoft’s Azure cloud and is therefore independent of the infrastructure that Lufthansa Systems provides for its navigation apps. If there is a fault in the digital map solution or a server, the necessary data can still be accessed in a browser. “With Lido/RouteManual Backup, this administrative effort is a thing of the past. The new web-based solution enables fast, secure access to customized information – from anywhere, on any device,” said Igor Dimnik, Director Strategy and Market Development Lido/Navigation at Lufthansa Systems. “Pilots just need a functioning Internet connection to access the backup copy before a flight. They can view the maps in a browser or download them as PDF files. This forward-looking digital backup solution is Lufthansa Systems’ response to strong demand in the market.”

MORE

  • If you are interested in this: “The long-prophesied threat of airlines bypassing the travel technology giants like Travelport was shot through with a bolt of electricity this summer thanks to American debuting a way for agents to connect directly with it.” Then, you will be interested in reading this.
  • The folks at AIN alerts noted: “SmartSky Networks, which is developing a new air-to-ground airborne connectivity network in the U.S., has delayed launch of its 4G LTE service until mid-2018, according to the company. Its earlier projections were to start service in 2016, but that was subsequently moved to late 2017.” (We also should mention that the Airborne Wireless Network folks have released a summary report on it’s proof of concept on two B767’s tested on May 31, 2017 confirming the mesh network technology. We have heard that they have also filed a patent on a “method of synchronizing laser-links between aircraft.”)
  • If you think Augmented Reality and Virtual Reality are not for aviation, think again and from Boeing. Notes Boeing, “Our C360 investment is a powerful example of how HorizonX can access rapid advances in innovation outside aerospace and bring them to our Boeing customers,” said Steve Nordlund, Boeing HorizonX vice president. “Putting additional capital to work and linking C360’s innovators with our Boeing teams allows us to accelerate new solutions, while providing new market access for C360. It’s a win-win — especially for our customers.”
  • Potential aerospace applications of C360’s innovative video technology include more capable autonomous systems and other advanced platforms. Boeing joins a group of investors led by BlueTree Capital making up C360’s $3.5 million oversubscribed series, a fundraising effort that also includes contributions from MI-12 and Pasadena Angels.”
  • You gotta see this!!!
  • Could this be politics???

STILL MORE

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