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Monday, August 1, 2011

Q&A: Honeywell Defense and Space

After a decade of fighting overseas wars, the U.S. defense industry is undergoing some downsizing. Pentagon officials have declared the need for belt-tightening as it draws down troops from Afghanistan and Iraq. The U.S. military and its suppliers are turning their attention from major, large-scale programs to fleet upgrades, modifications and life-cycle extensions.

Honeywell Defense and Space, a supplier of a wide range of engineering, products and logistical services to the U.S. Department of Defense, NASA, government agencies, international ministries of defense and defense contractors worldwide, is preparing itself for the coming squeeze, reaffirming its focus on providing the right equipment for the right customer at the right time, according to the division’s President Michael Madsen.

Madsen is a 24-year Honeywell veteran who was named to his current position in October 2010. He most recent came from Honeywell’s Airlines Customer Business Team, focusing on customer strategy, sales, customer support and new product program management covering all Honeywell Aerospace products for the aftermarket. Madsen spoke to Avionics Magazine about defense budgets and the defense industry’s role in modernizing the U.S. airspace.

Question: The FAA’s Next Generation Air Transportation System (NextGen) relies heavily on the GPS system to modernize the airspace. However, GPS isn’t perfect. Can you describe how the GPS system has evolved? And what is needed to prolong its use?

Answer: The GPS systems are ubiquitous. They’ve been around for a while but there are continued evolutions in this space that are starting to pick up speed a little bit. I would say that we’re seeing, particularly in the commercial area, the integration of GPS systems with other systems and protocols to enable higher efficiencies and safer operation of aircraft.

A good example of that would be Honeywell’s SmartPath system, which is a ground-based augmentation system (GBAS) that enables GPS to be used for precision landing operations which has a lot of value, as you can imagine. It enables the airlines to get aircraft in and out faster and safer as well. Why that’s an enhancement to GPS is that it consists of ground-based GPS receivers that are very precisely located as well as communications between aircraft and those GPS receivers on the ground. You can think of it as a way to add even more precision to the GPS signal than what it provides on its own.... Because you can provide such a precise location of that aircraft it can operate more tightly spaced and it can interface with curved approaches and other types of precision landing techniques that really enable the efficiency of the aircraft to be increased.

We estimate that on a typical airport that has two ILS runways, that the savings can be as much as $400,000 per year for the airport and there’s a commensurate amount of savings that goes along with the operator of the aircraft through fuel savings.

This is the kind of thing we’re seeing with GPS. Even though it’s been installed on aircraft for years we’re finding ways to integrate it with the systems on the ground and the systems on the aircraft for greater utility.

Q: Could GPS be eclipsed by other technologies? Will GPS always be around and in use?

A: Changes don’t happen remarkably quick in this space. These systems, once they’re qualified and certified for use on aircraft, tend to have some staying power, which is a good thing. It’s good in terms of cost, you don’t have people changing system out on a regular basis. We think we’ll see GPS stay around for quite some time.

If you go back in history, navigation was through the stars … then the inertial navigation systems technologies came along and that was the standard for many, many years, and then GPS has come along and now you have a combination of inertial and GPS.

We think those two systems will continue to be the mainstays for navigation for quite a while into the future. But we do expect that we’ll find new and better ways to use those GPS signals and, of course, continue to apply inertial navigation technologies in smaller, lighter weight and lower-cost packages.

Q: Do you see more operators opting for systems to fill the holes in GPS?

A: Absolutely.... We expect to continue to see an uptake in the SmarthPath system because of money that it saves, lower emissions and the safety advantages it provides, particularly for operators that are operating narrowbody, shorthaul aircraft that have multiple take-offs and landings per day; it’s a real advantage for them in terms of asset utilization.

I think in particular it’s part of the technology that’s been into the NextGen plan, replacing ILS with GBAS technology has been identified as part of that NextGen plan. We do expect that to continue to get more prevalent and the equipage on the aircraft to take advantage of that will increase as well.

Q: NextGen in the United States and SESAR in Europe are dominating much of the conversations in the commercial segment of the market. How is NextGen and SESAR impacting the defense business and how do you see that going forward?

A: I think the defense segment here is more of a follower rather than a leader in this space for a couple of reasons. First of all, in some case, in many countries, military aircraft operate in controlled airspace, either because the airspace is controlled entirely by the country or because they operate in MOAs, they kind of have their own rules to play by. So there’s a lot fewer of them flying at any given time. And their priorities are a little different than a commercial air transport operator.

However, it is clear that once these protocols are in place and we start to see the traditional ILS systems replaced … as we start to see procedural airspace, controls over trans-Atlantic replaced by automatic dependent surveillance-broadcast (ADS-B) In and Out, in-trail procedures, that the military aircraft flying those routes will adopt that technology as well. They’re just not the driver for it based on volume and based on where their priorities are.

Q: You are relatively new to your position. How has your background in the air transport side of the business prepared you for your current position on the military side?

A: I think we’re clearly at a watershed point right now in the defense industry. There’s no question that all developed nations in particular are going to have a reduced posture on defense spending during the next 10 years as we draw down from the wars in Iraq and Afghanistan.

‘We’re clearly at a watershed point right now in the defense industry. All developed nations are going to have a reduced posture on defense spending over the next 10 years.’

As we face the budget pressures that many of the Western countries are facing today, we’re going to have to look closely at defense spending, which means I think less defense spending overall and a reprogramming of that defense spend.

At the same time, we’re seeing a real need from the services for a focus on cost of ownership, whether it’s fuel efficiency or maintenance costs or acquisition costs, the whole focus on cost of ownership and efficient use of the money relative to the payback that these systems provide, when you think about that, and you think about the tightened defense budgets, this is a world that is very familiar to anyone who has operated in the commercial space where everything is a for-profit operation.

Commercial operators routinely look for a good payback on the investments they make, the benefits of all the available systems and the reduced-cost mentality is really standard in the commercial space. So having come from that sort of a background, my goal is to try to ensure that Honeywell continues to think and behave in a way that is consistent with providing value to the customer. It’s not about responding to a specification or just giving the customer what they may have asked for; it’s about helping them understand what’s possible and how we save them money, how we can lower their emissions, how we can reduce the cost of ownership and acquisitions of the systems that they need and get the best value for the reduced amount of spend that they’re going to have available.

My goal is to try apply that very commercial-minded sort of approach that we’ve operated under for many, many years here at Honeywell and make sure we have that same sort of thinking with our defense customers.

Q: Have you already started noticing the reduced military budgets in your operations?

A: I would say that we certainly see it coming. And we’re prepared for it. We’ve had a lot of engagement with the services in the U.S. as well as abroad, and a lot of very good dialogue, particularly around energy efficiency and what our products can bring to bear relative to lower energy costs, whether its fixed-base operations costs or aircraft energy costs …

Honeywell’s fundamental principles around safety and efficiency and comfort are really the principles around which we focus our businesses and all of our products, so this is really nothing new to us. As we start to see the budgets impacted in 2012 and 2013, we feel like we’re in a very good position to provide solutions to help our defense customers meet those needs.

Q: Honeywell in June announced plans to acquire EMS Technologies. What will this acquisition mean for your division of the company?

A: We’re pretty excited about it. It’s going to benefit our customers, our employees, our shareholders.... It’s a natural fit to our portfolio of products. We were already a satcom provider and this is a nice addition to our suite of products and services in that respect. It will help us bring some new solutions to our portfolio around mobile and vehicle-mounted rugged mobility expertise around radio frequency and satcom technologies....

When you think about what this is going to enable us to do around the C4ISR space, particularly for UAVs and UASs, but also for ground-based equipment, the need for bandwidth is going to continue to increase; we’ve seen this in every sector of the economy, aerospace is no different. The ability to get information to and from these airborne platforms is equally as important in the defense space as it is in the commercial space for different reasons.

But the demand for bandwidth is only going to go up.... For the Defense and Space sector particularly, there are many military and many NASA communications satellites that use EMS’s technology and things like antenna systems, beam management capabilities, all these things that enhance this mobile network centric operations, UAVs, UASs, autonomous vehicles and the ability to get information to and from the battlefields, so it’s a very nice fit for us.

Q: What are some growth areas for Honeywell Defense and Space?

A: Like many, we recognize that the number of large exquisite, large-scale programs and new starts is going to go down in the next several years, particularly in the United States.

Our focus is flawless execution on our programs, whether it’s delivery, quality, development program activity, continuing to execute flawlessly to the customer to continue the business we already have; that’s job one and it’ll always be job one.

I would say relative to looking forward to where the defense space is going, we’re going to continue to position our business to be effective around mobile applications distributed system capabilities, C4ISR and I would also say modifications, upgrades and service life extensions.

We have a lot of products available today that can be installed on aircraft that are flying today that can bring benefits in the form of fuel savings, cost of operations, maintenance costs, lower emissions, safer operations, greater capability to operate, in reduced visibility situations, for example, when we see the large-scale procurement budgets get re-programmed, we think the demand for those types of products is only going to increase. We’re talking a lot with our defense customers about what they need and how they see those needs emerging as they go forward and we feel pretty good about how we’re positioned relative to those kinds of mods, upgrades and service life extension opportunities.

ONLINE

To listen to a pocast of this interview, visit www.aviationtoday.com/podcasts.

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