Delta, others, smarting from new bird strike tests

Rotation

The US FAA’s decision to step up its scrutiny of bird strike testing of large antenna radomes has had a profoundly negative impact on airlines’ schedules for offering Ku-band satellite-supported inflight connectivity to passengers, but the end result will bolster passenger safety.

Let’s look at Gogo, for instance. Buoyed by a positive market response to its agreement last year to bring a new ground-to-orbit (GTO) connectivity system to Virgin America’s Airbus A320s, as well as the FAA’s decision to permit the gate-to-gate use of personal electronic devices, Gogo’s stock in December surged to an all-time high of $35.77 per share (and is currently trading at $23.00).

Behind the scenes, however, the company is scrambling to  gain supplemental type certification (STC) for its Ku-band connectivity system on various aircraft types to support equipage of Delta’s international fleet, as well as equipage on new customer Aeromexico’s Boeing 737 fleet and Japan Airlines’ domestic fleet, including Boeing 777s.

The company’s equipage plans have taken a hit due to the FAA’s “reinterpretation” of bird strike testing rules last year (some industry stakeholders say the agency is simply – finally – adhering to its own protocol in a bid to double down on safety). The FAA standard requires evaluation of bird strikes at the design cruise speed (VC) at sea level or .85VC at 8000 feet altitude. The agency is operating with an immense amount of precaution, suggests a source, adding, “There has never been a demonstrated bird strike of a radome in-flight mainly because aircraft fly nose up on final approach.” Even so, the FAA has made clear that passenger safety is paramount.

Because of this new paradigm, Gogo and Delta’s schedule for connectivity installation and certification is clearly trending significantly to the right. Gogo, which has received STC for the Boeing 747, ran into difficulty in receiving STC for its system on the Boeing 767;  placement of the Ku-band radome – directly over the wing join/wingbox – proved problematic. Gogo says only that it is working towards gaining STC for the 767, and other types. A Delta spokesman says, “We’re continuing to work on the situation to find the best solution quickly.” He declined further comment.

While a safety-related delay to the program makes perfect #PaxEx sense, it could impact Gogo financially.

In June 2012, Delta announced to the world that it would begin offering inflight Internet on its long-haul international fleet starting in early 2013. Nine months later, on 20 March 2013, the carrier formally inked an agreement with Gogo covering the terms and conditions for the installation. While explicit details of the pact are not publicly available, Gogo’s S-1 filing to the Securities & Exchange Commission (SEC) indicates that if Gogo has not retrofitted a certain amount of aircraft based on an agreed formula – which takes into account installation and activation of connectivity on another operator (believed to be United Airlines) – it must provide Delta with a credit or refund that may be applied by Delta only toward the purchase of equipment pursuant to the agreement. Significantly the filing stipulates that the credit will be calculated as follows:

                   $25 million multiplied by the Installable A/C Ratio (where the “Installable A/C Ratio” is the number of Installable A/C divided by [***], provided that the Installable A/C Ratio shall not be greater than [***])

In short, even when reading between the lines – or the stars, as it were – it’s clear there is a lot at stake here, and we’re not talking about chump change.

It’s not clear, however, if any of the actions outlined in Gogo’s agreement with Delta have been triggered as a result of the schedule fallout stemming from the FAA’s guidance.

Because physical bird strike tests can take two to three months to set up, inflight connectivity vendors are turning to simulation methods as a substitute, providing the FAA approves their proposed test procedures. Gogo is understood to have tabled simulation proposals to the agency, and equipage on a Delta A330 is expected soon.

Another Ku-band inflight connectivity provider whose equipage schedule has taken a big hit due to the new guidance is Panasonic Avionics, which is in the process of equipping 300-plus aircraft in United Airlines’ fleet, and whose customers include Lufthansa, Gulf Air, Turkish Airlines, SAS, Singapore Airlines, Garuda, Emirates, Etihad Airways, Kenya Airways, Aer Lingus, Air France-KLM and British Airways (the latter two are trials).

Company VP, Global Communications Services David Bruner, in a candid interview, says: “In the past we placed our radome in a place where under normal conditions, a bird simply can’t hit the radome. When the FAA changed the rules and mentioned nose down [formation], etc, while improbable it is possible for a bird to strike it. So we [turned to] a group in Boeing, who does mostly military work and they did this originally for Connexion by Boeing, and it’s a simulation. They have all Boeing airplanes in there and they can simulate all types of aerodynamics, so we said, ‘You guys do this’ and it took forever to come up with a methodology for it, but at the same time [using the FAA’s new guidance] we shot a bird at a radome at a section of the fuselage to see what would happen and it turned out that both things are important.

“By really doing the test, you see what really happens, and it actually supplies the data, and you can see into your simulation. It makes your model more accurate. So basically now, we’re running through all these simulations to get to a point where we have simulations that pass. And in that process, it forced us to make changes to the way our [Saint-Gobain] radome attaches to the aircraft to make it much stronger so that even under the most severe situation, everything remains attached and there is no safety issue. Your ability to land the plane is what they [the FAA] are interested in. Those changes took place; we confirmed that ‘yes, we’re good’, and now we will continue to install on STCs grandfathered through.

“On any new STC – or where you’re changing anything about a current STC – you now need to prove you can withstand the new bird strike [rules], so it’s new installations [that have impacted] us. So we’ve probably seen a 300-aircraft loss due to this issue in terms of installations. A couple of key customers’ programs were very affected, so we’re all very frustrated. It’s not just [about] showing what happens if the antenna radome is hit, and a bit flies off, and if you get some movement, there are so many questions and details and things that have to be supplied. We chose to not go to the FAA until we had solid, definitive and favorable information and could answer every question they asked. That’s pretty much a different path we have taken versus others, but it cost us from September to now to go through a lot of this, and even a few more months.”

But the impact of the FAA’s fresh guidance extends beyond connectivity installs. Airlines seeking to complete other aircraft cabin modifications at the same time have had to contact their MROs and put the brakes on the work. “This has been a big negative impact to the business in 2013. All of us are finding our way in this, and hopefully in 2014, we will all get ourselves back on track. But for broadband on airplanes [this] is really a difficult negative blow, especially for those airlines who are trying to get out ahead,” says Bruner.

“You either have a bullet proof radome and be able to land the aircraft safely under any situation or you don’t.”

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