How would you rank the AFIRS 220 against what’s available in the market?

Mention some of its benefits and drawbacks?

AFIRS 220 has significant technological advantages over ACARS & FDR. AFIRS 220 can
replace other flight communication and recording systems but as FDR is required by World
aviation authorities, AFIRS 220 can only compete over ACARS:

1.       Of the total available market (TAM, Exhibit 1) in 2004 business and commercial plane
owners accounted for 90% of the total available market of 87, 757 aircraft. FLYHT had sold
just 200 units at the end of 2012.

2.       FLYHT's market share represents a paltry .02 percent under the generous assumption
that the available market has not expanded.

3.       In addition, based on the number of hours logged with AFIRS systems (case exhibit 6),
which decreased in 2011, it appears that they have not sold to the high-use and big airline
carriers for business and commercial flying.

4.       Eight years should have given the business ample time to at least develop itself for
those wanting or requiring a practical need to upgrade. For those interested in improving
their networking technologies, FLYHT is has obviously dropped off the radar.

Lower installation cost : The cost to install AFIRS 220 is only $50,000 per unit, it costs an
airline $150,000 to install ACARS on each airplane, thus saving is obtained in highly
competitive industry.

Technological Capability: ACARS offers short messaging communication (100 – 200

characters) and needs ground-based radio towers for transmissions (line-of-sight
technology). The data transferred through ACARS are weather updates, air traffic delays, and
clearances, and flight plans. Operational data is also provided but very limited due to
technological constraints.

AFIRS 220 uses satellite-based technology to provide a stronger two-way form of

communication with operational data in real time. The effective range is greater considering
satellite coverage and no requirement for line-of-sight . AFIRS 220 also has technological
advantage over ACARS in developing countries, where ACARS is not useable due to the lack
of VHR radio infrastructure.

Huge financial gains & risk mitigation: AFIRS 220 helps save two minutes of an error on
each aircraft/cycle. This means an airline with 18 aircraft and 140 cycles a day will save an
extra 84 hours.

The drawbacks are mentioned in the 3rd question.

How well is FLYHT positioned to take market share from its competitors?
The total demand available for FLYHT 's goods is estimated at 57,712 aircraft on the basis of FLYHT 's
2004 business plan (Exhibit 1). FLYHT's systems were built and operated on a total of 200 aircraft
from 2004 to 2012, reflecting a market share of 0.35 percent for FLYHT.

The limited market share gained by FLYHT over eight years shows that the company had trouble
crossing the chasm from the early adopter market to the mass market (early majority).

What are some of the reasons for the slow uptake of AFIRS 220?
1. ACARS has been used by airline firms for so long, rendering them hesitant to embrace
modern technologies (AFIRS 220).
2. The adoption of the new technology would lead the airlines extra cost in terms of Training
the Pilots and printing new manuals for all of their aircraft leading to extra cost
3. The larger avionics companies were better known by the brand and incumbent airlines were
reluctant to revise their systems, get buy-in, provide training and republish flight manuals.
4. Resistance from pilot unions, who claim airlines will spy on them, and maintenance people
do not really know what to do with all the data coming from a new system.

What plan of action would you recommend to Matt Bradley to speed up sales of
AFIRS 200?
1. Collect and publish result data from “the base” to reassure the value proposition of its
product. FLYHT first needs "a reference base and a support base to enter the mass market
(early majority)." Airlines in developed countries are a potential base, because ACARS is not
available in these countries. Such carriers would have less replacement costs or barriers to
service interruption.
2. To enhance / emphasise its value propositions, FLYHT might initiate an advertising campaign
about the positive statistics gained from their base study. Businesses have a self-interest in
finance, but they need to consider what's in it for them. Media coverage would also boost
their brand image and market reputation.
3. Fix the main issues that cause market resistance: FLYHT should build a low-cost model and
manual for minimal impact training. The learning barrier from transitioning to a new system
will be reduced. Seek additional funds for improved stability and additional exposure by
venture capitalists.
4. Highlight the old system's security issues vs. the new: highlight the lack of security and lobby
flight companies to make a necessity for real-time communication systems