Some questions for the conference call (I've sent a few through...

Some questions for the conference call (I've sent a few through to Warrick and Simon):

Presumably CVM units are fitted to aircraft when they come in for routine (6-montly) structural inspections and maintenance. If so, we may expect a considerable lead time in the roll-out of CVM across the Delta 737 fleet, so...

1. Will a mere purchase order from Delta of $6-7M trigger the threshold for future Delta commissions on CVM sales, or is this arrangement contingent on CVM actually being installed in Delta aircraft? [If a purchase order will do it, I reckon it's already been raised...]

2. Will Delta pay an annual licensing fee for its use of CVM tech.?

3. Will OEMs pay annual licensing fees to be permitted to install CVM sensors?

4. Will SMN fix prices globally for CVM sensors? Will AEM, SMN or third-party(ies) handle sales of CVM units?

The Federal Aviation Authority (FAA) approved the use of CVM for specific SHM applications in all Boeing 737 Next Generation (600-900) series aircraft in late 2015. Boeing 737-NG Service Bulletins have been modified accordingly. As of July 2017, Boeing had produced 6466  737-NG aircraft since 1996.

Delta has the 4th largest 737-NG fleet in North America (146 active). SMS was engaged for some time in negotiations with Southwest Airlines (667 active). Is Southwest close to placing an order for CVM? What about United (326 active) or American (296 active). [Air Canada, the 5th largest carrier in North America, is a minor player compared to the big four, but still has a significant A320 series fleet.]



SMS have been incredibly strategic in their decision to target the 737-NG aircraft, the most popular passenger aircraft in North America (see graph) and the world... closely followed by the Airbus A320 series (318, 319, 320, 321) aircraft. [NB the cluster of A319, A320, A321 in the graph]

5. How advanced are programs to gain approval for CVM use in Airbus A320 series (318, 319, 320, 321) aircraft? With the FAA? With the European Aviation Safety Agency (EASA)? With other regulatory bodies? What are the likely time frames for these approvals?

CVM uptake outside the US will be significantly influenced by SHM regulations in regions outside FAA jurisdiction.

6. What effort is SMN taking to promote CVM uptake in countries with similar compliance regimes (like Australia) that have significant numbers of 737-NG aircraft (i.e. Qantas 72, Virgin Australia 78)?

7. Does SMS have the capacity to advance the roll-out of CVM to 737-NG aircraft operators while advancing the range of other civilian and military applications for CVM in the aerospace industry?

8. Has SMS made any significant progress in identifying new partners to accelerate the uptake of CVM for other commercial/industrial applications.

I've sent my pick of these to SMS; I expect they'll get a bunch of similar questions, esp. around revenues and roll-out. Hopefully they'll be able to given forthright answers (they generally do), notwithstanding commercial-in-confidence, contract pending, etc. issues.  All IMO. GLTAH R-7

PS  fleet data from http://www.airfleets.net/flottecie/Delta%20Air%20Lines.htm, etc. (as per the MacEquity report, although this gives only gross fleet figures for Delta, which is somewhat misleading).