Interest soaring in airplane crack-detection company
By Jamie Freed
Updated1 February 2016 — 12:49pmfirst published at 8:02am
It is every airline's worst nightmare: an undetected crack developing on an aircraft that leads to an extreme event in flight, such as the explosive decompression of Aloha Airlines flight 243 that swept a flight attendant outside the Boeing 737 to her death in 1988.
US carrier Delta Air Lines, which has an average fleet age of 17 years – more than double that of Qantas – has become the first airline to use technology developed by Australian-listed Structural Monitoring Systems (SMS) in Perth to monitor aircraft structural fatigue with an array of sensors.
Delta Air Lines is using Structural Monitoring Systems' sensors to detect fatigue on some of its aircraft.
SMS shares have risen 40 per cent to $1.47 since it received approval in late December from the US Federal Aviation Administration (FAA) and Boeing for its technology after a test program with some of Delta's 737s.
Overall, SMS shares have risen 287 per cent over the past 12 months, compared with a 10.1 per cent fall in the benchmark S&P/ASX 200 index over the same period.
The FAA and Boeing approvals mean SMS has the only commercially approved technology in the world for on-aircraft monitoring of cracking and structural fatigue. The sensors are placed on the aircraft and help provide early warning of developing cracks.
SMS managing director Toby Chandler said the technology worked on aluminium and composite airframes and therefore could be employed on commercial aircraft from all manufacturers, including Boeing, Airbus, Embraer and Bombardier, as well as on helicopters.
Faster and easier
The initial FAA and Boeing approvals meant it should be much faster and easier to gain additional approval for various types of applications on aircraft in the future, Mr Chandler said.
"Going forward, the ability to identify new applications, which would be done in partnership with operators and [aircraft manufacturers], will be simpler," he said.
"For Delta and a lot of operators, the long-term iteration for our technology will be to have the [manufacturers] delivering new aircraft with structural health monitoring systems installed at the point of sale."
For the customer, the cost of the sensors, which are manufactured in Canada, is typically up to $US20,000. That is significantly less than the typical loss of revenue from an airline grounding an aircraft for a mandated inspection under an airworthiness directive related to fatigue.
The SMS technology has been approved by Boeing as an alternate maintenance program to conventional inspections.
Mr Chandler said SMS has had programs under way with Airbus and Embraer for some time to develop sensors appropriate for use on those aircraft.
SMS is working to develop a business model that centres on licensing the technology rather than just selling the physical equipment.
Key year for company
He said 2016 would prove key for the company, which listed more than 10 years ago but has not been in a position to commercialise the technology broadly until now.
"We are now going to move into a much more proactive commercial phase," he said.
The company had $482,000 of cash at December 31, but it has already told investors it plans to undertake a capital raising of about $1.5 million later in 2016 to help it hire more employees in North America and Europe.
This is an article which is over 2 years old, and answers questions that investors continually ask in regards to the CVM technology.
MAIN POINTS :
1. Used on both Aluminium & Composite airframes.
2. Going forward, the ability to identify new applications, which would be done in partnership with operators and [aircraft manufacturers], will be simpler," said Toby
3. We only now require the next announcement with a OEM deal or FAA aporovals or Operator to sign on or Helicopter deal or annoucement that sensors are now being made by the thousands or the next quarterly update on AEM progress.
4. The last quarterly points are a reflection on the last 2 years of progress. It just did not happen a few weeks ago! The long wait is nearing to an end, and a new chapter is soon to begin.
GLTA.
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