In the world of aviation, the most promising innovations are in mobility and versatility, not break-neck speed. Today our featured expert Scott Fitzgerald draws upon his 20+ years of experience in the aviation industry to answer some of questions about trends in fixed wing and rotary wing aircrafts.
I’m frankly a little overwhelmed with all of the new technologies in the aviation space. What do you see as the most promising development in the next 5–10 years?
I would say, the advent of vertical takeoff. Vertical takeoff in aircrafts like the V-22 [Osprey] combines the best of both fixed wing and rotary wing worlds. The technology has taken some time to develop, but as it’s developed it serves as a very futuristic platform for both military and commercial applications. It provides the benefit of heavy cargo lift without the logistics of needing a full infrastructure to carry things and people to remote areas. As this technology continues to advance, it’s going to fundamentally reshape the industry and a lot of the thinking in commercial and military applications.
In terms of vertical takeoff, who are going to be first movers?
Initially, the military has been the first to adopt the technology, particularly needing to get supplies and troops and other logistical support to fairly remote areas. The military has been a great place to prove the concept, but it’s a matter a time before this concept finds its way into the oil and gas world. Largely because as the price of oil stabilizes and find its ways back north of $50 a barrel, we’re going to see a need for a faster and safer transport of people out to deepwater areas where more drilling can take place.
You’re also going to find that the search and rescue community will adopt the technology more because it’ll give them so much more capability in terms of long range search and surveillance. It’s also going to appear in law enforcement, especially in border control.
How does drone technology play into this demand for flexible transportation?
Drone technology is going to have a very specific space and will ultimately replace a lot of the lighter man-flight objects, especially in regards to the delivery of packages. But you’re still going to need the pilot element and technology element in some of the more remote areas. You may find that drone technology will find its way in the same technology but that’s further down the road. But for now there will be a human element in vertical takeoff and vertical landing in this generation.
Do you think the concept of Blade (Uber for helicopters) has legs?
Personally I’m a bit skeptical. The Uber concept was about replacing an existing infrastructure. Uber was convenient and it was a low cost operation to get into.
Aviation has more difficulty because the cost of that type of transport really takes the market from a wide swath (including the poor college student) to a narrow market that really isn’t price competitive. The Blade concept is seeing whether they can replace some of the ground transportation. But I’m not sure if the convenience and cost really follows the same model as Uber. There are also a lot of regulations in terms of where to takeoff and where to land, which can also really keep this from taking off.
I recently read an article about these next generation jets that are going to travel from New York to China in less than 3 hours. What are the biggest obstacles preventing next-gen jets like Skreemr and Antipode from being commercially available?
The challenges will be around creating designs that won’t fatigue the aircraft. The lifespan of an aircraft is largely impacted by the pressure changes that takes place in various altitudes. Now you’re adding super high velocity as well.
The technology that’s currently on our fighter jets is very well equipped to deal with these environmental changes. Getting the price of this technology down enough so that people can actually incorporate in commercial is key. Making sure the fatigue isn’t so high that people can use these aircrafts more than a handful of times is going to be important in terms of keeping cost low.
Airline industry operates with razor thin margins about 3%. Do you see any way for this to improve in the future? And is there a segment of the industry, which generates more return?
The margins in aviation are narrow in the operations side. OEMs tend to make more margin on the larger ships then on the smaller ships as a percent and it can really skew the overall profitability since more smaller ships are sold than larger. Operationally the margins have been pretty good in the O&G space however that has certainly taken a turn in recent months. When times are good, the margin with O&G is very attractive over other segments however in recent months it has become hobbled by the turn in the price per barrel of oil.
The great news is that for the most part, EMS operations have a better margin when fuel prices drop since the contracts are not directly tied to the price of fuel. I think the margins will improve in the next few years but only after the excess capacity currently in the O&G and EMS space is absorbed or flushed out. ACA has also had an impact on the rotary wing space for EMS operations. ACA does not distinguish reimbursement based on the number of engines that are on the aircraft so many operators are having to reconsider their fleet make up and its impact to their bottom line.
Scott Fitzgerald provides expert consulting in the aerospace & defense industry. He was the VP of Commercial for GE Capital Aviation Services, the Director of New Market Development for CHC Helicopter, the VP of Sales and Marketing for Erickson Air Crane, and Executive Director EAME for Bell Helicopter Textron.