Ann: CVM Installations on Multiple Aircraft, Multiple Fleets, page-53

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stoneral33

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17/04/19

08:47

Post #: 38173737
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Originally posted by 22112215: ↑

One thing that picked my interest was that Delta had already finalised their 2019 budget, thus a deal was being made by both parties to get started now and defer the payment till 2020.
That comment didn't seem right, it's only 20 planes worth of sensors which they have sitting ready to go anyway, what's the big deal? They are a $38b company, surely paying for some sensors isn't going to break the budget.
So I read through Delta's last yearly report.
They spent over $1.5b on aircraft maintenance and parts/materials. The fuel bill alone had to be factored into account as it blew out $2.3b which wasn't accounted for.
So for Delta to ask SMN to defer for next budget it would seem to indicate the costs for purchasing and installing the scale of sensors they are predicting isn't going to be in the minor millions, it indicates a huge amount.
I counted roughly another 15-20 airlines they are in ventures with which would also be looking at installing plus the new applications in the pipeline.
I was dissapointed when I first read that no revenue would be coming in from this first installation but from looking closer at the language used and the amounts of what Delta consider to be acceptable costs (read above) I am quietly confident that this is going to be a huge revenue stream for 2020 and onward.

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Going to be a CR..they have NO CASH..and DAL don't have them in the budget as you rightfully pointed out..What is the revenue model?????? This thing to backslide for months yet..DYOR

SMN Price at posting: 88.0¢ Sentiment: Sell Disclosure: Not Held
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0 Great analysis

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