June 27, 2016
Subject: Fifth Edition 2016 CEO Letter to FLYHT Shareholders: Customer Success Stories
Dear Shareholders and Interested Parties;
In this fifth edition of our letter to shareholders, I will begin to share stories about our customers’ successes and the value they receive by using the Automated Flight Information Reporting System (AFIRSTM). This letter is intended to demonstrate the cost savings that airlines have experienced using AFIRS by streamlining their operations and improving their operational safety. Two different success stories are presented today, the first highlighting an engine vibration problem and the second highlighting operational improvements for an airline. These two real world examples help to demonstrate the range of scenarios where AFIRS can save operators significant money.
Our first example involved a customer’s Boeing 767 (B767) high engine vibration experience. The customer uses the data that AFIRS’ gathers from the aircraft for predictive maintenance and engine trending to help avoid unscheduled repairs and the associated costs of dispatch interruptions.
As part of fleet expansion plans, the customer purchased several used B767 aircraft. Each aircraft had to undergo extensive audits and inspections prior to operations and all were deemed completely functional. However, after only two weeks in service, AFIRS reported turbine vibration exceedances in one aircraft’s engine. AFIRS was able to detect this abnormality because of its unique ability to monitor onboard sensors and compare this data in real time against limits which can be set according to the original equipment manufacturer (OEM) specifications or the airline’s own thresholds. If onboard sensors produce data which is outside these thresholds, AFIRS sends alerts to FLYHT’s ground-based server interface, UpTimeTM, which immediately notifies key personnel with either email or textmessage alerts. In this particular example, in order to facilitate early detection of potentially serious problems, the airline deliberately set the limits below those established by the engine manufacturer. As a result, UpTime reported each exceedance, within seconds of occurrence, to the operator’s maintenance personnel. These reports resulted in the engine being placed on a watch status for subsequent flights.
Shortly after this first set of events, a second set of events was reported, indicating that the turbine vibration was increasing. The airline made the decision to pull the aircraft out of service for further investigation. Ground runs confirmed AFIRS’ in-flight reports and demonstrated that the engine was close to a turbine failure. If this failure had occurred during flight, it could have resulted in a total loss of the engine as well as possibly endangering the entire aircraft. A serious mechanical flaw in the turbine was confirmed at the overhaul facility that would have led to disintegration (the hot section would have blown apart) had it been allowed to continue in operation. There was no collateral damage to any other parts of the engine because it was removed from service before the problem caused more trouble. The engine was repaired and returned to service. The operator credited their decision to remove the aircraft from service to the AFIRS’ data and particularly to the early warning of a problem that was not otherwise causing alerts in the cockpit.
The cost savings for the airline was significant. The replacement cost for the engine would have been $5.2 million; however, the repair cost based on AFIRS’ data-driven decisions was much less: $780 thousand. Additionally, the cost of an in-flight failure would have been much greater than the cost of a replacement engine and could have been a significant safety risk to the airline. The airline avoided an in-flight failure of an engine and dramatically reduced their cost to resolve the engine failure using AFIRS’ real time alerting capabilities.
AFIRS provides basic flight following information such as aircraft movement messages (OOOIs: out, off, on and in times), and standard flight following reports. The technology also implements geo-fence functions that can be used to advise the airline via text or email when an aircraft either enters (or exits) boundaries defined by the customer. This geo-fence alerting is particularly useful in situations where direct voice communications are limited or where multiple parties are involved who rely on a different information to provide effective ground support.
The second success story describes how a customer used AFIRS to overcome limitations in ground infrastructure in a remote location. In this particular scenario, the lack of ground resources at the aircraft gate location made it difficult for the operator to understand when the aircraft had arrived and created delays in dispatching ground transportation. The net result for the client included poor customer satisfaction, delays in operation and additional costs.
The customer installed AFIRS and created customized alerts based upon aircraft location and flight status.
AFIRS now provides improved information sharing to advise all parties, in real time, on the progress of each flight. This includes when the passenger boarding process has begun, when the aircraft has left the boarding facility and is taxiing for departure, and finally when the aircraft has departed and its estimated time of arrival. Each service party is sent an email at the appropriate time with the necessary information. This creates a set of autonomous operations which is much more efficient because different operations occur based on the readiness of their dependent operations.
To date, this program has been a huge success and has achieved its goal of improving customer satisfaction and reducing costs by eliminating the effects of poor communication and logistical support issues.
These very different success stories identify the broad range of cost saving capabilities that AFIRS provides. In fact, we have had customers describe our product as a “Swiss Army knife” because of its broad range of application. The bottom line is that the product saves our customers money and improves the efficiency of their operations while enhancing safety. We hope these success stories shed some light onto the value that AFIRS provides our customers and we will identify and share different examples with you in the future.
Best regards –
Thomas R. Schmutz