You mean markets can’t just go straight up and real interest rates won’t be zero forever? I didn’t see that coming.
Still, there are signs the economy is building some traction, despite Republicans blocking investments that scream to be made. Maybe that dysfunction won’t go on forever, either. It had better change at some point, or the U.S. has a far less bright future than it should. Are you registered to vote?
We stood out a bit at the Paris air show show. I’m told our booth (pictured here) was the only double-decker in the hall (i.e., with an upstairs). Watch this brief video to see the CEO we’re betting on.
Bob Fyfe: “Honeywell/Safran has signed at least two potential customers: EasyJet and Air France. The big problem is that even if WheelTug wins all of the business from every airline, they won’t have the pricing power that they had when they were the only game in town. I believe it also puts at risk the leasing model, assuming that Honeywell/Safran is planning to sell the system outright rather than lease it. That would drastically change the present value calculation of WheelTug. They may still have a very good business, but I believe that *billions* is now out of the question. I was worried about this for you all the way back in 2006. I’m still rooting for you.”
☞ The rooting is appreciated. I hadn’t seen that EasyJet story. Has there been anything on it in the 15 months since? I’d like to think EasyJet will take a look at WheelTug’s offering, too — which is exactly what you’re saying about competition potentially driving out some or much of the profit. Then again, Honeywell and Safran are two big companies. They will probably want to price their system in a way that makes them a meaningful profit. And it may take more profit to be meaningful to two large companies than to one small one.
Monday’s Air France announcement is good news for Honeywell/Safran, though seems to stop short of a commitment to buy or lease the systems. (Here is one explanation of the difference between an MOU and an LOI. WheelTug has LOI’s with 11 carriers.)
As AirInsight describes the playing field . . .
EGTS team [Honeywell/Safran] are industry Goliaths compared to WheelTug – however WheelTug, which demonstrated its competing nose-wheel system more than a year earlier, already has commitments from 11 airlines for nearly 600 aircraft for its nose-gear system, and several additional customers pending announcements. EGTS now has an agreement with Air France for tests.
Of course, WheelTug’s 11 customers could likely find a way to bolt for the Honeywell/Safran system if it proves to be better. But will it prove better? Or even as good?
One issue is that their system may be hundreds of pounds heavier. If so, that’s a lot of extra weight to carry on every flight every day all the time if you don’t need to. Another issue is that Honeywell/Safran put their motors in the main landing gear, where the brakes are. The brakes get very hot, as I understand it — so hot, in fact that, quick turnarounds may sometimes be extended because of the need to wait for the brakes to cool. Add motors inside those same wheels and you may add a bit of heat — even as you may block some of the airflow that helps cool the brakes.
All this is speculation . . . but so, after all, is Borealis.
Have a great weekend. Next week should be a busy one down at the Supreme Court.
Quote of the Day
Your average Wall Streeter, faced with nothing profitable to do, does nothing for only a brief time. Then, suddenly and hysterically, he does something which turns out to be extremely unprofitable. He is not a lazy man.~Fred Schwed, Where Are the Customers' Yachts?
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