SMN - FA (by an amateur), page-12

I like your analysis Lock

I wanted to simplify the analysis to look at it a slightly different way. So

I used your thoughts to convert your numbers firstly into planes and then sensors to see how it compares with the increased ability in production up to 2000 units per month. For this conservative exercise I'm using 25 sensors per plane at 2,000 per sensor for a total cost of 50K. Less cost for Delta.

2018/2019
Tier 1
* Delta 70 planes = 1750 sensors.
Assuming all the following take up the technology in the 2H of 2018. Bit unsure about this so early, however.
*American (1/2 for 2H 2018) 38 planes = 950 sensors
* Southwest (1/2 for 2H 2018) 28 planes = 700 sensors
* United (1/2 for 2H 2018) 30 planes =750 sensors
Total 166 planes = 4150 sensors

At current production capacity of say 550 sensors per month this demand requires 7.5 months of production.

2019/2020
Tier 1
* Delta 70 planes = 1750 sensors.
*American 76 planes = 1900 sensors
* Southwest 56 planes = 1400 sensors
* United 60 planes =1500 sensors
Tier 1 Total 262 planes = 6550 sensors
Next largest 6 for 2H 2019
* Next 6 100 planes = 2500 sensors
New planes by Airbus and Boeing at 117 per month for 2019 = 1404 new plane for 2019/20. For my exercise I will be using only 6 months of this data assuming that only 50% of planes will use sensors or that the corporations only adopt the sensor in the 1h 2020. You will see why I did this at the conclusion.
* New planes (50% adoption or 1H 2020) 702 planes = 17550 sensors

Total 2019/2020 1064 planes = 26600 sensors

At current production capacity of say 550 sensors per month this demand requires 48 months of production. No way could they satisfy the demand at current capacity.

At a production capacity maxing out at 2000 per month its still 13.3 months of production.

So you can see why I downsized the new aircraft numbers by half and that we still won't cope with the demand even with the improved production capability without further capacity increases. Or alternatively you could assume full new aircraft takeup and lose some of the airlines.

2020/2021 The problem gets much bigger.

So assuming we run at slightly less than maximum capacity and allowing for some downtime at 1900 sensors average per month for 12 months we can produce 22,800 sensors for 912 planes per year.

Even assuming only a 50% markup on sensors (at 2,000 per sensor) when all costs are taken into consideration ( assuming some discounting to the manufacturers) and ignoring licencing revenue completely that's 11.4 million profit.

Just another way to look at the numbers Lock analysis provided.

Its exciting.

cheers Lies