Thursday, 15 May 2014

FLYHT Conference Call & Global Update


FLYHT CEO Bill Tempany covered a broad range of topics in yesterday’s (May 14th) first quarter conference call with a strong emphasis on the status of key business initiatives such as China and L-3 Communications-Airbus as well as several key conferences that FLY representatives will be attending in the near-term.

In re-capping first quarter results, he noted that the organization remains focused on achieving the break-even point in 2014. In the quarter FLYHT generated $1.34  million in revenue; which represents a decrease of 21.5% over the same period last year. However, Q1 customer deposits were $1.30 million, an increase of 100.2% over the first quarter of 2013 and unearned revenue was $1.36 million, also a solid increase over last year.

In relation to FLY’s revenue model, Mr. Tempany expressed that it is important to understand the below points:
  • When a customer makes an order, the customer gives FLYHT a deposit.
  • Then when FLYHT delivers the order, it registers as "Unearned Revenue."
  • When the unit is installed, and activated the sale them moves into AFIRS UpTime Sales.
  • Then if the airplane is in service, FLY generates monthly AFIRS UpTime Usage fees. 
Mr. Tempany also spent considerable amount of time talking about the latest announcement from Inmarsat, as there were a series of questions on a recent announcement from the satellite company. It stated that it is now going to offer customers free real time data streaming, which speaks to the controversy surrounding the disappearance of Malaysian Flight 370.

He said that he believes this offer of free data streaming doesn't affect FLYHT. Flight-following is just one small piece of the technology that FLYHT provides, which is first and foremost designed to save airlines money and increase operating efficiency. That functionality, though important, isn‘t driving the sales of FLYHT‘s AFIRS units. For example: China's mandate is for satellite communications, or satellite phones. Inmarsat does offer satellite communications, however the system is more expensive than AFIRS and there a major dead zones, particularly over the poles.

Global Maxfin Analyst Joe MacKay sent some notes from his attendance at yesterday's ICAO (International Civil Aviation Organization) press conference on the offer of "free basic" airline tracking.

"ICAO indicated during its press conference that it was "thankful" to Inmarsat for their offer, but at the end of the day, the Inmarsat proposal "probably does not get us where we want to be, and we told them that today." ICAO is putting together a task force(based on 20 member states) that will review and make recommendations to ICAO by September (FLYHT is a member). They are working under a best practices methodology which means that members can be complaint based on what is best for their circumstances (i.e some members do not fly over water as much as others).

To listen to an archive of today‘s conference call, please click here

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