Aviation components supplier Astronics appears to have mostly emerged from the sales cycle doldrums of recent years. The company cautiously notes, however, that three segments of its business are not yet performing as desired. The Aeronautical Satellite (AeroSat) segment is among these and the company is keen to finally deliver a break out quarter from that group. In the most recent earnings call CEO Peter Gundermann emphasized this goal and called out the Business Jet market as a key focus for the company.
Part of the challenge there is that such deals require close coordination with partners. But partners drive the sales to aircraft owners. Meeting those demands is a critical step in the design and production process. After a bit of trouble with one BizAv partner Gundermann says things are moving forward again.
We’ve talked in the past for example about a big tail mount opportunity to bring broadband worldwide connectivity to big business jets and that is a program that we work with a couple partners on. There has been a little bit of a shuffling of the team there. One former partner got off, another new one is on and that program was kind restarted in earnest at NBAA…a few weeks ago and we’re optimistic and I will be very straightforward that a big part of our goal for next year or AeroSat in particular is heavily wrapped up in that program.
The deal includes Satcom Direct and Intelsat, with the companies launching the SD Xperience global tour last week. Satcom Direct’s Gulfstream G IV launched an around the world journey with the kit installed. At each stop the company demonstrates the product as it exists in real world circumstances, on a real aircraft.
Gundermann sees a universe of roughly 4,000 BizAv aircraft to fit with connectivity in the coming years and hopes to secure a reasonable portion of that market. “It’s reasonable that on the average big business jet the people flying in back, they’re going to want connectivity when they go over the ocean and the options up to today are not that great.” Gundermann is also not shy about what those numbers mean to potential revenue:
So if we can get $200,000 or $250,000 [per installed aircraft] in a universe of 4,000 airplanes it potentially is an exciting opportunity for us. We’re certainly not the only ones. There are other companies addressing this market, but we’re taking a serious swing at it and that’s part of the reason, the big part of the reason why we’re hanging in there.
As for other companies addressing the market, Astronics is part of at least one of those plays as well. Upstart phased array antenna company Phasor aims to deliver an aero solution in late 2019 but knows that it cannot meet the FAA certification requirements on its own. Phasor CEO Dave Helfgott explained to PaxEx.Aero that the company will partner with Astronics to help complete the certification effort. Fortunately, at least for now, Phasor intends to focus on commercial aircraft to start, not the BizAv segment. But given the conformal shape of the phased array hardware, the generally smaller size of the kit, and the significant addressable market still in need of connectivity extending that offering to the BizAv market could be a smart play.
Earnings call transcripts provided by Seeking Alpha (and edited as the original was pretty bad).
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