Investor Communications

FLYHT CEO Letter – Eighth Edition

October 4, 2016 Subject: Eighth Edition 2016 CEO Letter to FLYHT Shareholders: Pioneer Spirit – Flight Tracking Dear Shareholders and Interested Parties; FLYHT was recently featured in the 2016, Issue 3 of Air Traffic Management Magazine (ATM). In light of recent articles and news releases from the industry about tracking, I thought it might be interesting to investors who might not have access to the ATM article to read our submission and learn more about FLYHT’s solutions. Tracking is an important part of the FLYHT solution suite, but is not the core element. Knowing “Where” your assets are located is very important, but knowing “How” they are, or what is their status, is paramount. FLYHT solutions offer both the “Where” and the “How”. Most people would likely be surprised to learn that the company that invented real-time data streaming and the first airline to implement it are Canadian. When you get down to it, there’s quite extensive aviation innovation taking place across the country and a plethora of experts to bring the technology to the forefront. FLYHT Aerospace Solutions Ltd. is based in Calgary, Alberta, Canada and since 1998 our mission has been to improve airlines’ communication and real-time information about their aircraft. FLYHT has developed a unique ability to capture, process, and transmit aircraft data, coupled with alerts, including real-time data streaming. First Air is one of FLYHT’s customers taking full advantage of the technology’s benefits that provide direct insight into the operational status and health of their aircraft, and enabling the ability to take corrective action in order to maintain the highest standard of operational control.

Industry Initiatives

FLYHT is in a prime position to help operators implement the International Civil Aviation Organization’s (ICAO) Global Aeronautical Distress & Safety System (GADSS). FLYHT, with its technology, the Automated Flight Information Reporting System (AFIRSTM) anticipated these global tracking requirements and AFIRS can be used to assist airlines with GADSS implementation. AFIRS is installed on aircraft and uses proprietary software to acquire and transmit aircraft data to the ground in real time, where it is then processed and distributed to the customer using FLYHT’s ground server network called UpTimeTM. AFIRS meets the GADSS’ proposal in all main areas including aircraft tracking, autonomous distress tracking and the transmission of flight data. AFIRS supports aircraft tracking in both normal and abnormal operations. In normal operations, where GADSS requires aircraft position reports every 15 minutes, FLYHT’s customers have the ability to customize their position reports to the interval most suited to their needs. The Iridium satellite network’s global coverage enables reports to be sent from any worldwide location. Furthermore, where the ICAO has yet to fully define an abnormal event, FLYHT works with airline customers to program the system to meet their definition of an abnormal event. An abnormal event, as defined by an airline or regulatory body, can include a flight plan diversion in course, speed or altitude or a mechanical issue and AFIRS can be customized to identify an abnormal event to meet an operator’s unique needs. A direct “lifeline” with the operations centre allows them to gain additional support because the crew on the ground sees the aircraft data, knows the aircraft position and status and can assist the crew. In the case of an abnormal event, the FLYHTStreamTM program, enabled by AFIRS, can stream flight data recorder (FDR) data to the ground in real time. FLYHTStream meets the GADSS proposed feature of autonomous distress tracking, when a parameter is pre-programmed into the system and an event occurs, the FLYHTStream program will automatically start streaming FDR data to the airline in real time. The real-time FDR data gathered by FLYHT customers using the FLYHTStream program is extremely valuable to assess a situation and to understand the location and the status of the aircraft. In the event of an accident, the streamed data is beneficial for immediate investigation; especially if the FDR can’t be recovered or if it has been compromised. FLYHTStream can be activated in three ways; automatically, as a result of the technology’s ability to recognize a system abnormality, manually by the pilots through the use of an “event” button located in the flight deck, or by the dispatcher at the airline. The FDR data is secure when streamed and access rules for this data can be established to follow standard FDR recovery requirements. An additional feature of the FLYHTStream program is to alert the airline that streaming has begun through audible and visual alerts so an operator can take immediate action. Messages are sent through email, text messaging and on FLYHT’s aircraft situational display (FLYHTASDTM). FLYHT provides our customers with the ability to know where their assets are at all times and what is happening onboard. This functionality is revolutionary within the aviation industry and represents a paradigm shift as operators realize the value this data provides.

AFIRS’ Core Functionality

FLYHT’s customers benefit and use our products for a variety of purposes distinct from the ability to track aircraft and stream FDR data. FLYHT serves operators globally who need to solve problems within their operations or improve their current systems and processes. As a result of the real-time data they receive through AFIRS, airlines are able to enhance their operational control, increase dispatch reliability and realize operational cost savings. FLYHT products automate processes to save on the manual gathering and review of aircraft data. As mentioned above, FLYHT’s use of the Iridium satellite network enables global coverage for voice and text messaging to and from the cockpit and dispatch. Additionally, FLYHT is CAN-TSO-C159b certified for FANS 1/A, ADS-C, CPDLC and ACARS over Iridium messaging capabilities. Airlines use FLYHT’s real-time proactive health monitoring program, FLYHTHealthTM, for automated engine trend reporting as well as engine/airframe threshold exceedance reporting and remote systems diagnostics. This reduces the chance of unscheduled maintenance delays and can diagnose and determine the root cause of an issue long before the aircraft reaches its destination. AFIRS also enables FLYHTFuelTM, a fuel saving program which monitors eight parameters and is used to train crews to modify their behavior and save money in their operation of aircraft. AFIRS In Action Canadian airline operators are leading the field when it comes to real-time data, tracking and FDR data streaming. FLYHT’s customer, First Air, is the first airline in the world to use FLYHTStream’s FDR streaming capabilities. The airline had been using AFIRS for two years previously when they added realtime streaming in April, 2014. First Air operates throughout the Canadian Arctic’s harsh conditions, and as a result continually research methods to improve the safety and operational efficiency of the airline. By enabling FLYHTStream, First Air raised the standard of their tracking and automated alerting which is unsurpassed in the industry. In a space where no two airlines are the same, a key feature of FLYHT’s technology is the configuration of programs to meet airlines’ unique operations. First Air was provided control to set the triggers for streaming, frequency of flight following reports and to select the data that is sent to the ground; features standard within FLYHT’s AFIRS product. In conclusion, FLYHT will continue to offer our industry-leading technology to assist and improve airline operations as the industry takes steps to move to an increasingly connected airspace. Increased connectivity will enhance functionality and accessibility of key data, creating growth and enhanced safety in the industry and the international airspace. Best regards – Thomas R. Schmutz CEO, FLYHT