TSX Venture: FLY
Shares Issued: 142.5 million
Fully Diluted: 182.1 million
Late yesterday (November 5th), SKYBLUE Technology Development, a leading avionics distributer for Chinese airlines issued a news release declaring that the company has received an initial order for 218 of FLYHT’s AFIRS units from seven different airlines. The installs will start in the first quarter of 2014 and roll out over three years.
It’s an understatement that this is significant news for FLHYT. The point not to be missed is that this first large scale order for the Automated Fight Information Reporting System (AFIRS™) comes amidst the backdrop the Chinese government has mandated that approximately eighteen hundred aircraft in the country are to be equipped with a satellite communications system by 2017.
This does not suggest that FLYHT is going to win contracts for every aircraft, but it is first out of the starting blocks with this news.
According to FLYHT management, the company believes it can capture a large piece of the Chinese market because of the years it has spent developing strong relationships in China, and AFIRS is much less expensive to install and operate than its major competitors.
FLYHT’s investor presentation notes that the company receives $35 to $60 thousand per AFIRS installation (2012). Financial expectations of what China should mean to FLYHT’s revenues are not being discussed at this point. Click here to view FLY’s investor presentation.
To put this order in context of the existing install base, to date there have been more than 350 - AFIRS™ 220’s installed in aircraft and more than fifty 228’s have been shipped. This order, once complete, would increase the install base by sixty percent.
To view the translated SKYBLUE news release, please click here.