Thursday, 10 January 2008

AeroMechanical - You Can't Fly Without It


An influential analyst updated his already positive report on AeroMechanical by essentially concluding that airlines can't afford to fly without AeroMechanical's technology.
Research Capital analyst Jacques Kavafian said now that oil prices hit $100 US per barrel, airlines should consider using the Automated Flight Information Reporting System (AFIRS) because there are few options left that could generate as many operational cost savings.
"Through these and other savings, we estimate that AFIRS can save anywhere from $150,000 to $250,000 US or more per aircraft per year, a potential that very few airlines can afford to ignore," Mr. Kavafian wrote in a January 9th update to his original report that was published late last year.
In his original report, Mr. Kavafian predicted AeroMechanical's shares would trade at about $3 by late 2008. In his update, he stuck with that share price prediction and on January 10th, AeroMechanical's shares closed at $1.02.
In the update, the aerospace industry expert said airlines using an AFIRS unit could save one per cent of a modern passenger jet's annual fuel consumption, which at a fuel cost of $0.75 per litre would translate into annual savings of up to $144,000 per plane.
There are a number of other ways that same airline could use an AFIRS unit to add significantly to an airplane's operational savings, he added.
"In summary, as airlines search for ways to reduce operating costs, AFIRS may become indispensable, thereby providing significant growth to AeroMechanical," Mr. Kavafian wrote.