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Commercial Aircraft Display Systems – Going ahead in the right direction |
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(Source: Frost & Sullivan; issued Nov. 9, 2004)
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Commercial Aircraft Display System (CADS) market is huge and is expected to expand with the growth of the information we live in. CADS market is an established and developing market in the USA and EU. In the Asia Pacific region, this is an emerging market. At present, the world market is dominated by a few big players with many small players holding a part of the market share. Growing demand for improved and sophisticated data systems that are thin, light weight and provide multi-displays with ‘enabling technology’ is driving this market.
DISPLAY SYSTEMS:
Aircraft display systems can be segmented into primary flight displays; multi-function displays; head up - head down displays; and in-flight entertainment cabin displays.
Industry believes there is a need for improved primary flight displays (PFD) which provide mapping and weather information, altitude, pitch, yaw, roll and attitude information, and, a need for enhanced ground proximity warning systems. Pilots feel a necessity of visual displays and not just audio. Some companies have already started improving their products. A few examples are, a) Honeywell’s low-cost, Enhanced Ground Proximity Warning System (EGPWS) which provides pilot with a map of near-by terrain with different color codes according to terrain’s elevation. The system also provides audible and visual alerts if the aircraft comes within imminent danger of collision with terrain or obstacles.
Pilot’s Night Vision Systems (PNVS) is gaining importance off-late and their market is expected to grow in future, with majority of airlines increasing their night flights and customers too preferring to fly in the night.
In the fast-paced environment, with aircrafts flying in different atmospheric conditions, most of the aircrafts face turbulent climatic conditions while flying at some point of time in their life cycle. Engine might create some problem in the long run. So, good quality caution alert systems as is a display are a necessity. There is a huge market potential to trap with rapidly improving technology. This is a "happening" market at present.
Frost & Sullivan forecasts that there is a huge market for Enhanced Vision Systems (EVS), which delivers the highest level of situational awareness to pilots and greater safety and accurate landing decisions in low-visibility conditions. A better EVS in terms of display picture, size, contrast, brightness, color of display and other definitions allows a better maintenance and fault recording. A few accidents in the past would have been prevented if EVS was used, and, the airliners and manufacturers are taking initiatives to tackle such issues with the use of EVS.
Multi Function Displays (MFD): PFD‘s capture only the more basic features. There are times when different types of information might be required but the numbers of display system units are less. Thus, multi-function displays (MFD), that allow a pilot to toggle and get different data in different formats of his choice is essential. With increased flying hours, and to distant places at different time frames, and safety requirements, the MFD market is bound to grow, and, conventional wisdom suggests that they might tap a part of the PFD markets in a long run.
Head up and Head down display systems (HUDs & HDDs) are mainly used during take-off and landing. They allow the pilots to view the essential flight information looking directly outside the wind sheet. Flight symbols and Enhanced Vision System (EVS) imagery are displayed by the HUDs. With pilots demanding better navigation display systems, and with the new technology and definition provided by HUD and HDD’s, this is a huge market in commercial aircraft display system industry.
Head-up display systems, Head down display systems, Enhanced vision display systems and Pilot night vision display systems at present are not used in many of the aircrafts but their future looks very bright because of the increasing need of these displays felt by the airliners and pilots. Retrofitting and replacement of display systems is a major cost for airlines and it’s a cost they have to incur by default because there are not many alternatives. So, technological improvements, if combined with retrofitting or replacements, would be an added advantage for the airlines.
The aircraft display system industry and the aviation markets are inter-dependent. Post 9/11, intelligence and security became a major issue for all the airlines. New platforms and display systems that could provide with such information to the pilot creates a huge market for CADS. The impact of downturn on air travel has not just been on the airliners, but, on the aircraft manufacturers, as well. The orders have reduced and cancellations and postponements have increased since early 2001 till mid-2004. The first quarter of 2002 saw an increase in travel compared to 2001, but, the rise was not in tune to get back to normalcy.
The airlines are optimistic, and, they ought to be. They cite the increase in passenger traffic, increasing number of low-cost airlines, and thus, increasing orders for new airlines. The down-turn began in the early 2001 and 9/11 made a classic example of "Rubbing salt on the wounds". Thus, the current downturn is worse, compared to the earlier ones and it is reflected in the cycle being the most weakest in terms of reduction in passenger traffic, yields, and profit margins.
But, have airlines learned to manage the cyclicality better? The answer is partly yes, but, the challenges too have become complex, thus, keeping the airlines again on their toes. The war in Iraq, SARS and 9/11 set back the aviation industry by two years. Passenger traffic is slowly increasing and once airlines start managing operational issues better and optimize their service and position their product, revenues per kilometer (RpKm) would increase. The orders for new airlines have been on a positive side off-late (2004) and industry believes that it would be on a rise.
New aircraft being bought by airlines in turn increases the market for commercial aircraft display systems. To overcome the sluggish air travel environment, few airlines are planning to introduce services similar in line with the concept of "low-cost, quality-service", in the future. There are new private airlines (no-frills airlines) which are entering the fray too. A few of the established airlines are looking at converting their subsidiary airlines into low cost airlines. Though most of the industry experts are keeping their fingers crossed on the success of low cost airlines and the competitors are keeping a close watch on the market, it is still accepted that at least a few of them would survive and it is forecasted that majority of them would buy new aircrafts and try to balance out between cost and service.
There is thus an accelerated procurement and development of new airborne platforms, which is driving the market. New airborne platforms lead to more orders for display systems too. Asia Pacific region is witnessing a sudden trend towards low-cost airlines with most seats booked in low-cost airlines till early 2005 (i.e., 4 months in advance). The other regions (EU and USA) are expected to follow the trend.
Asia Pacific is an emerging market for CADS while the established market in EU and USA is expected to rise further.
TECHNOLOGY:
From a technological point of view, the past shows that the electromechanical and the bulky, power consuming CRTs are being replaced by LCD displays. Only a few displays have CRT technology used at present (2004). The later development of Active matrix LCD (AMLCD) brought about the digital terrain maps, digital terrain charts and multi-spectral imagery. The future demands that LCDs be replaced with the new Flat Panel/Flat Screen technologies and the Silicon vision technologies, and, this seems an upgrade, which is really possible in the near future (2005). Plasma technology may not come-up in use so early because of 1) The cost factor associated with it, and 2) The lack of necessity felt by the airliners or the pilots or the manufacturers.
Liquid Crystal Display (LCD) technology provides higher quality images and improved reliability compared to the Cathode Ray Tube (CRT) technology. Flat vision and Silicon vision technology are expected to revolutionize the future, but, it also depends on the effectiveness, cost-wise and functionality wise. Conventional wisdom relates that the future technological advances like Synthetic vision systems (SVS), Surface guidance systems (SGS); low cost, low power, thin flexible displays; and organic light emitting diode display systems (OLED) that provide the possibility of being rolled and folded are a possibility. With technologic advances, the market looks a very challenging one in the future.
CRTs are bulky and consume more power. LCDs offer a better choice. But, would Flat Panel and SVS and OLED replace the LCDs and CRTs completely? Is there a possibility of new technological advancement? Accepted that CRTs growth rate is falling, but, will the CRTs become flat enough to improve their growth rate? These issues need to be answered and the answer is a big yes for technological improvement and upgrades and industry believes that the older technology would not be able to catch up with their new counterparts, if the newer technology is managed properly. But, how many, how much and when still need to be answered.
MARKET COMPETITIVENESS
The market is dominated by a few big players and many small players. Most big players are trying to expand their business either by M & A (Mergers and Acquisitions) or by partly owning a few small stakeholders as subsidiaries. Some others are teaming up together for their mutual benefit. Others are looking to tap the unexplored markets in Asia-Pacific and the Middle East regions.
The working model and strategies governing the display systems market of Honeywell Avionics, Elbit Systems, Rockwell Collins and SAAB would give some insight.
Honeywell, a leading global provider of integrated avionics, engines, systems and service solutions for aircraft manufacturers, airlines and airport operations has sales of $10 billion from its aerospace business out of the entire $ 25 billion revenue from its diversified technology and manufacturing services. Honeywell Avionics acquired Bendix/King. This acquisition helped Honeywell expand its business into the multi-function display market. Considering their products, most of the Ground Proximity Warning Systems have a list price of $ 12,510 and a few others range from $ 9,980 to $ 40,420. Among the multi-function displays, KMD 250, KMD 550 and KMD 850 models are the lowest cost multi-function displays in the Bendix/King line with pricing starting at $4,000. In the Head-up display systems segment, Elbit Systems and Honeywell teamed up to supply HUDs to the commercial air transportation market.
Earlier in 2002, Rockwell Collins Flight Dynamics and The Boeing Company signed contracts to team up for the supply of HUDs in the US market. Aerodyne is one of the low-cost providers of HUDs with $6,689 for the pilot’s HUD and $2, 889 for an optional co-pilots HUD.
Saab Tech partly owns Avitronics, Logtronics and Grintek Communication as its subsidiaries. It generates annual sales of about 1,400 MSEK. Their products range from mission recording systems, digital map systems and multi-function displays to servos, gyros and precision mechanics.
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