[Avionics Today 02-01-2016] Honeywell CEO Dave Cote told analysts and reporters during the company's 2015 earnings call Jan. 29 that the aerospace segment is in a prime position to capture lucrative opportunities in commercial retrofitting of avionics systems and onboard Internet technology. Aerospace sales for Honeywell increased by 4 percent to $3.98 billion in the fourth quarter of 2015, capping off a year where the company made major strides toward supporting the next generation of aircraft Internet Protocol (IP) capabilities, among other advancements.
Honeywell's JetWave Inmarsat GX Aviation hardware. Photo: Honeywell Aerospace.
According to Honeywell’s published 2015 earnings report, aerospace commercial Original Equipment (OE) sales were up nine percent for the year while commercial aftermarket sales increased by three percent. Total aerospace segment profit increased by 10 percent to $3.2 billion. Cote said the company expects another year of slow economic growth in 2016, however he is confident Honeywell will remain competitive going forward, especially within the commercial avionics segment.
"It doesn’t really have any affect on us," said Cote. "When you take a look at what’s happening in the aerospace industry, the biggest thing for us is that flight hours increase. And flight hours last year were up 4 to 5 percent; they are likely to be up 4 to 6 percent again this year, and the big thing is that planes fly. As long as they fly, and as long as there’s a need for the type of upgrades that we keep talking about, and as long as the technology keeps progressing towards this connectivity and [there is] the need for airlines and passengers to just be connected better than they have in the past, those are all good phenomenon for us."
Just last week Honeywell reported a major connected aircraft milestone for its JetWave wireless In-Flight Connectivity (IFC) system, which received FAA approval for the Boeing 757
. JetWave is the exclusive hardware approved for aircraft to connect to Inmarsat's next generation Global Xpress Aviation service.
"The big thing is flight hours continuing to grow and the technology especially on the software and connectivity side continuing to develop," said Cote.
Cote was also encouraged as to Honeywell's prospects as a major player in the connected aircraft segment because of its merger and acquisition activity in 2015. During the 2015 NBAA conference in November, Honeywell announced an agreement to acquire Satcom1
, a provider of on-board communications routing software and a satellite communications provider of airtime and consulting services. The Satcom1 announcement followed another agreement earlier that month to acquire Ontario, Canada-based Com DEV International, a satellite and space components provider.
Within both the connected aircraft and aircraft avionics aftermarket upgrades market segments, Honeywell will continue to face a highly competitive environment.
In business aviation, Rockwell Collins recently announced VistaJet as its first business aviation customer to adopt Inmarsat's Jet Connex service as part of its ARINCDirect offering. The company, one of Honeywell's largest competitors, is a value-added reseller of Jet Connex as part of its ARINCDirect product offering. The first flight of the Boeing 737 MAX
last week featured Honeywell's Electronic Bleed Air System and Rockwell Collins' large format flight deck displays.
All of the connected aircraft competitors mentioned above have also provided press releases and video coverage recently, demonstrating how their technology can enable both high-speed connectivity for passengers in the cabin, as well as pilots in the cockpit, and operations crews communicating with the flight crew and tracking the aircraft's health systems and components on the ground.
Regardless of the competition, during the 2015 earnings call, Cote said Tim Mahoney, president and CEO of Honeywell's aerospace division, has been encouraged by the company's earliest activity around its JetWave offering coupled with Inmarsat's GX Aviation service.
"I can’t put any numbers on it at this point. So far, Tim’s pretty excited about what he’s seeing, [and] the sign up rate and the speed with which they’re able to acquire new customers," said Cote.