Heavy Lifting, Inc.
Market Analysis Summary
The customer base anticipated for Heavy Lifting, Inc.’s products and services includes:
- Airport owners-provision of Heavy Lifting products, financing and consultation services.
- Regulatory Authority-provision of Heavy Lifting products, finance and consultation services.
- Insurance Industry-provision of information regarding the Heavy Lifting concept and products, the need for and the provision of Heavy Lifting weight & balance weigh bridges for civil aviation.
- Aircraft manufacturers-Boeing Aeroplane, Airbus Industries, BAC, Embreaer and other major international aircraft manufacturing companies-consultation and service partner relationships.
- Flight Safety Organizations-International safety consultant services related to the concept of Heavy Lifting aircraft weight & balance systems and their benefits to flight safety.
- International Civil Aviation Organization-assistance to ICAO in the preparation of weigh bridge related standards and related procedures (SARPS).
- Sate Governments-assistance with the formulation of Government policy, regulation drafting and incorporation of weight & balance weigh bridge SARPS in State legislation.
- Data production services (Heavy Lifting, Inc. data services)-providing aircraft operational weight & balance and other data and statistics for legislative monitoring, compliance, research and audit of International civil aviation weigh bridge systems.
- IFALPA & Private aircraft owners associations-educating pilots on the availability of the Heavy Lifting concept product and systems.
- Consumer rights groups and civil aviation passenger representative organizations-to educate and inform them of the Heavy Lifting concept, product and system. Demonstrating how Heavy Lifting can help improve flight safety through compliance, monitoring, audit and data collection of aircraft operating weights.
- Accident investigation bodies and other safety organizations-provision of data and consultant services on an as requested basis.
- Aviation educational organizations-provision of presentations, papers and general information of an educational nature on the Heavy Lifting concept, product and systems.
California is the best place to launch Heavy Lifting due to the support of the CA state government towards technology based companies. FAA and Air YY Inc. and airport owners in CA are also progressive and in touch with their new responsibilities under the ICAO Global Air Safety Plan (GASP) and the International change of emphasis on responsibility for aircraft safety (Duty of Care). X International Airport will be targeted once their present contract with B. Company, Inc. approaches maturity. The airport is in close proximity to the founding shareholders and enjoys co-ownership of Y Airport.
The Heavy Lifting concept is a novel and practical approach to improving International flight safety created by the principal founding member, Captain Airway. It has long been Captain Airway’s dream to introduce this long-overdue piece of safety equipment to the International aviation industry. Now free to pursue this dream, retired from full time airline pilot duties, he feels he has the time and energy to devote to his Heavy Lifting concept and products.
By forming such an experienced team to run Heavy Lifting, Inc., success for the company is guaranteed. As Heavy Lifting, Inc. is the first company in the World to introduce this concept, a considerable degree of competitor challenge can be diluted by the element of speed and surprise.
Obviously, as the concept takes hold worldwide, other aircraft weighbridge manufacturers will emerge as competitors. With an estimated worldwide demand in excess of twenty thousand (20,000) weigh bridges at large to medium airports in ICAO-member-contracting states, let alone the non-contracting States, smaller airfields, portable weigh bridges and future military requirements, Heavy Lifting, Inc. is assured of a comfortable slice of the revenue pie. Demand is based on estimated ten thousand (10,000) commercial airports worldwide.
As the creator of the aircraft weight & balance weigh bridge concept, Heavy Lifting, Inc. has the added advantage of setting the industry standards and requirements for all future aircraft requirements. These standards (ISO 9002 certified) will ensure a healthy load of orders for Heavy Lifting, Inc.’s products well into the future.
The ongoing need for education, training, maintenance, service enhancements, data provision, and new technology innovation will further swell the order books at Heavy Lifting, Inc.
4.1 Market Segmentation
Heavy Lifting, Inc. will create the market for Heavy Lifting aircraft weight & balance weigh bridges with a carefully-planned educational campaign. As its creator, Heavy Lifting, Inc. will control 100% of the market, for at least the first couple of years. Controlled growth at the major airports in California, and European markets will give some maturity and stability to both the markets and the company.
Markets for weigh bridges: airports
- European Union: By the time Heavy Lifting, Inc. moves into its third year of operations, some opposition may be found in the European Union (EU) through complaints to the monopolies commission by European weigh bridge manufacturers. A loss of 30% of the potential market may be encountered by anti-competitive trade rule enforcement action by the EU. As Heavy Lifting, Inc. is primarily a flight safety equipment maker, this market opposition may be limited by trade licensing agreements to perhaps 15% loss. This still ensures a healthy 85% dominance.
- Canadian and U.K. market penetration should initially be able to be contained to 100% domination for at least the first two years under possible regulatory limits or trial permit limitations. The third year may see market dilution for Heavy Lifting, Inc. by as much as 30%, similar to the European mature market expectation. Again, a significant maintenance of revenues can be achieved by licensing agreements.
- Southeast Asia: Once Heavy Lifting, Inc. penetrates the SE Asian market, the market protection from external competition may lie in APEC membership by establishing a secondary headquarters in Australia. Secondly, many airports are still Government-owned and controlled, and Heavy Lifting, Inc., as the World leader in aviation weigh bridge design, construction and consultative services, should maintain a near 100% market share. At the very least market penetration by major competitors should be contained by involving them in licensing agreements. Market share should be a healthy 90% after corruption, graft and trade incentives are allowed for.
- United States: Entry into the U.S. market is much more favorable with respect to market share due to the patriotic nature of the market (as a U.S. Company) and the degree of collusion between business and the FAA. Heavy Lifting, Inc. may gain some advantage by both licensing agreements with U.S. manufacturers and partnership ventures. At the very least, Heavy Lifting, Inc. aims for 50% market share.
Obviously, the U.S. market potential is huge with more than 75% of the available airports of the world for marketing purposes. If even 50% of the market can be maintained, Heavy Lifting, Inc. stands to have considerable financial success.
Markets for consulting and data:
- Accident Investigation/Safety Organizations
- Insurers of Flights and Cargo
- Educational Institutions seeking data
The following table and chart reflect the number of potential customers for Heavy Lifting, Inc.’s products and services.
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Accident Investigation/Safety Organizations||0%||200||200||201||201||202||0.20%|
|Insurers of Flights and/or Cargo||2%||5,000||5,100||5,202||5,306||5,412||2.00%|
|Educational Institutions (data)||2%||3,000||3,060||3,121||3,184||3,247||2.00%|
|North American airports||1%||8,000||8,080||8,161||8,242||8,325||1.00%|
|Middle Eastern airports||1%||100||101||101||102||102||0.50%|
|South American airports||1%||100||101||101||102||102||0.50%|
|European Union airports||1%||500||500||500||500||500||0.00%|
4.2 Target Market Segment Strategy
[Proprietary and confidential information removed].
4.2.1 Market Needs
The international aviation market has matured over the past 60 odd years to the point where accident rates have stagnated. Admittedly at an admirably low level when compared to an other human transportation endeavor, however the public through the media still see each and every aircraft crash as a graphic catastrophe far worse than the accident rates suggest.
With the growth of International civil aviation forecast to accelerate by upwards of 20% over the next twenty years, this will translate into even more hull losses at the same accident rate. Any practical, cost-efficient flight safety enhancement must be seized by the aviation industry if a real reduction in the accident rate is to be achieved. Weighing aircraft before and after flight is a way of keeping the aircraft operators of toady and tomorrow honest. The fact these Heavy Lifting weigh bridges can also pay for themselves and make money is a revolutionary concept in fight safety.
Over the past decade, ICAO and other World aviation bodies have recognized that to reduce the accident rate the aviation system rather than the individual must be made accountable. Numerous studies have shown and are showing that factors such as corporate culture, national culture and cockpit culture affect flight safety. There is a growing move Airway from the blame the pilot game to one of accountability and responsibility for all aviation system players.
Thus the Chairman, Board of Directors, CEO and management of airlines are required by legislation in many countries to be accountable and responsible for their aircraft, crew and passengers. Similarly, as the result of deficient airport systems leading to fatal aircraft accidents, the owners and operators of airports are increasingly subject to accountability and responsibility laws. In addition, the ICAO’s Universal Safety and Audit Oversight Program is reinforcing this system wide approach to accident rate reduction.
Pressure from the insurance industry, both directly (through premiums) and indirectly (lobbying in government), is also increasingly turning the spotlight on airport and airline operators.
4.2.2 Market Growth
Market growth will depend mainly, in the beginning, on the financial fortunes of International airport companies. For the foreseeable future their financial forecast appear to be good. Growth in international passenger and cargo revenues for the next twenty years is projected by both IATA and ICAO to be in double-digit numbers.
As the product is more widely accepted as being essential to aviation safety and Legislation is introduced Internationally, the market will expand to countries in the developing and under-developed world. The U.N., the World Bank, Asian Development Bank and other trade lending organizations will be quite capable of providing funds for the Heavy Lifting concept implementation in these less-financially-able countries.
The advent of space travel and any other revolutionary personal mass travel systems that involve mass will always have a need to be weighed before and after flight, both as a regulatory requirement and a flight safety enhancement. The user pays philosophy behind the Heavy Lifting concept can contribute to a Global aviation market growth climate in an positive way.
4.3 Service Business Analysis
The U.S. Federal Government de-regulated the airline industry in 1978. Prior to that time the government virtually guaranteed the profitability of the airline industry, at the expense of the consumer. Routes were restricted. Fares were fixed. Costs got out of control. Today some of the major carriers still continue to operate at less than optimum efficiency. This has spawned the success of various “discount” carriers, most notably Southwest, ValuJet, and the new U2 planned by UAL.
Over the intervening years Governments in the U.K., New Zealand, Canada, the European Union and Australia have increasingly de-regulated their aviation markets. This has had many positive and some negative effects when compared with the old regulated aviation industry. First, it has spawned a whole new breed of aircraft operator, some good, some not so good. Second, airports in increasing numbers are being sold to private investors and being managed as airport companies rather than government services. Mostly good so far. Air Traffic Services such as New Zealand’s Airways Corporation operate on a fee-for-profit based structure, even as a monopoly. Maintenance, leasing companies and airport service companies are becoming increasingly globalized and internationally owned and operated.
This liberalization of the international aviation industry has led to the strengthening of national aviation laws and the introduction of strict entry level conditions on aviation industry would-be players. Regulatory safety oversight and audit is the catch phrase today. This has led to a new era of accountability and responsibility.
The aviation industry that Heavy Lifting, Inc. proposes to enter is still highly regulated. This is deemed necessary in the interests of flight safety, security and standards. Aircraft certification is mandatory in 188 contracting States to ICAO. Airport operators have to obtain Airport operators’ certificates. The ICAO USOAP program currently only applies to aircraft operations, personnel licensing and training and aircraft airworthiness requirements. The next phase is to expand the program to include Air Traffic Services, ICAO Annex 11 and Aerodromes ICAO Annex 14.
Over the past 100 years of aviation development (Wright brothers’ first flight, 17 December 1903), aviation flight safety has progressed in a number of different ways and at varying rates. The advent of two world wars accelerated technological aspects of aviation development. Flight safety demands, although conceived as early as 1919 with the formation of the International Civil Aeronautical Navigation (ICAN) organization, didn’t really start to become a major issue until the formation of ICAO in 1944 at the Chicago Convention.
In the early days of jet transport, as with previous technological advances in civil aviation, the innovation brought large loss of human life; major aircraft hull losses were the catalyst for flight safety improvements. Fail-safe part design, engine reliability, improved CBT pilot training and the utilization of computers to improve all manner of navigation, performance, communication and flight control functions all contributed to the reduction in both accident rates enjoyed today.
Amazingly, organizations such as ICAO and IATA saw no need for accurate and independent aircraft weight measuring. Instead, the industry has placed all their eggs in one basket, perhaps blinded by the seeming infallibility of computers, the calculation of aircraft weight by deduction. Aircraft weight calculations use assumptions, and assumptions by their very nature are not always accurate.
An aircraft is physically weighed only a few times in its life: prior to certification flights and after major hangar maintenance. But only the dry operating weight of the aircraft is weighed by means of verifiable, certified, accurate scales placed under the aircraft’s landing wheels in the maintenance case.
After this weight is recorded, all further weight increases are calculated. The dry operating weight includes lubricants, mandatory safety equipment and fixed aircraft fittings such as galley equipment, seats and seat belts but includes no fuel or payload.
To this weight is added the weight of the payload. Hold-stowed baggage, mail and cargo is weighed in the containers or as individual pieces prior to loading on small weighing machines. Carry-on baggage is not weighed but assumed not to exceed approximately 7 kilograms per passenger. This payload weight is added to the dry operating weight and becomes the zero fuel weight.
Next, the weight of fuel added to the aircraft is calculated. This fuel weight is calculated by using a measured volume of loaded fuel of a specific type and converting this volume to a weight by multiplying the volume by the specific gravity of the fuel. The loaded fuel is compared between the ground refueling figures and the aircraft tank measuring system figures. The total now of the zero fuel weight plus the weight of fuel is added to give the gross all-up weight.
From this point on, the aircraft weight is assumed to be correct. No independently verified check of the aircraft weight is carried out. From time to time, regulatory authorities carry out spot checks of various airlines’ weight calculating procedures. Occasionally actual passenger, baggage, mail, cargo and carry-on baggage are individually weighed but this rare and many passengers refuse to disclose their weights to anybody! Essentially the system is given an audit, not the equipment.
Aircraft weight (Mass) is an extremely important aspect of aviation safety. An aircraft’s ability to fly to performance standards, laid out in the detailed certification procedures, is dependent on a known aircraft weight. Fuel consumption, performance at different altitudes and temperatures, all are dependent on a known weight. The demonstrated ability to fly following the loss of a critical engine on take-off or go-around following a missed approach is an essential part of an aircraft’s certification procedure.
During certification, all items placed on the aircraft being certified are accurately weighed. For the rest of the life of that aircraft, this will in all probability be the last time an independently verifiable aircraft weight is known.
Why is the weight of an aircraft critical to flight safety? Put simply, if the aircraft is too heavy it can’t fly or stop in the remaining runway following a rejected take-off (balance field). If it is too heavy to land, it may not be able to stop in the distance available. Realistically, aircraft seldom take off at their maximum allowable weight or land at their maximum allowable landing weight. But sometimes they do. Long haul flights, fuel ferry flights, short cargo flights and adverse wind and temperature conditions all can put an aircraft at or over its maximum allowable take off or landing weight.
Moreover, these allowable weights vary from model to model and type to type. A DC 10-10 and a DC 10-30 have different allowable maximum weights, as do a B747-200 and a B747-400.
Many aircraft of the glass cockpit generation have eight measuring systems on board. These are generally operated by load sensors on the main undercarriage legs and fed to a computer for weight and centre of gravity computation. This hardware is universally either not ordered by the airline operator, or, in other cases, the software that makes the hardware operate is not purchased or activated. Various reasons are given by airline management and aircraft manufacturers as to why this situation exists, such as inaccuracies in windy conditions.
As mentioned in the preceding paragraph, centre of gravity (C of G) is also a critical requirement for successful flight. For example, a too far aft or too far forward C of G on take-off or landing can and has resulted in aircraft crashing out of control, due to lack of flight control whilst airborne. Correct aircraft loading is a very important part of the safety of flight for all aircraft.
The U.S. FAA began investigating the need for a modern method of weight & balance calculation in 1978 and settled for an onboard weight & balance system (OBWBS). This system is recommended to replace the current manifest weight & balance system (MWBS) as the primary WBS. However, the FAA realized that an external check system was needed to check the OBWBS. The requirement for mandatory OBWBS appears to have stalled.
Accident investigators arriving at the scene of a fatal aircraft crash attempt to retrace the steps of the fateful flight back to the start of take-off. The black boxes give them critical information about many parameters, including engine performance and airspeed, “G” loads and other computed data, but nowhere is there an accurate, verifiable or independent weight check provided.
Legally, an aircraft is not allowed to fly in contravention of various operating limits. Weight is one of those limits. If, after an aircraft accident, it was proven that the aircraft was overweight either at start of take-off or at point of landing, the aircraft operator, crew, airport operator, load controller and/or dispatcher could all find themselves liable for being in breach of the most basic rule of all, operating at an illegal weight. With the present calculated system no one really knows for sure what the actual aircraft weight is. Thus, no one can positively state what the aircraft weight was, or more importantly, what the aircraft weight was not. It is still a calculated guess.
Regulators around the world have become increasingly alarmed at the risk associated with the use of the present MWBS in respect to small regular public transport (RPT) aircraft. They have taken action to restrict the use of average weight tables on smaller RPT aircraft. Larger RPT aircraft are assumed to have a lower risk from WBS error but this assumption is challenged by Heavy Lifting, Inc. founder Captain Airway in his thesis paper [proprietary and confidential information removed].
4.3.1 Competition and Buying Patterns
A critical factor as a new entrant into the aviation industry will be regulatory authority awareness and acceptance. As this is a new product, a large amount of effort is needed to promote the product. However as this product is to be sold to a relatively small number of customers a global advertising budget is not needed. Rather industry specific trade shows and flight safety forums are the best way to spread the message of the Heavy Lifting system. An important tool to increase awareness of the need for external weight & balance systems will be a carefully constructed public awareness campaign using the aviation news media. Personal contacts in this regard are part of the assets of the company.
Safety in aviation is always number one. However just saying that does not necessarily mean that in practice that is so. Modern day industry players at all levels practice a large degree of risk management in their day to day businesses. In the case of Heavy Lifting aircraft weight & balance weigh bridge, Heavy Lifting, Inc. is not talking so much about the need to have the product but rather the distinct disadvantages of not having the product.
Airport operators, like aircraft operators are in the business to make money. But there different ways to make money as any good business knows. It appears to us at Heavy Lifting, Inc. that if a way could be found to make money by charging fees for use, that are seen by the users as fair and reasonable then the task would be that much easier. Additionally if it can be shown that as a result of using the new fee based system flight safety can be directly and measurably enhanced then so much the better.
As the general awareness and acceptance of an independently verified aircraft weigh bridge system, such as the Heavy Lifting system, catches on with the traveling public and the authorities, the demand for this service will increase. Airports with the Heavy Lifting weigh bridge verification program will be at the forefront of the travelling public’s trust.
4.3.2 Main Competitors
There currently no direct competitors to the Heavy Lifting, Inc.’s aircraft weighbridge system.
Manufacturers of on-board weight & balance systems, such as Honeywell Inc., are not seen as competitors, but rather as strategic partners.
4.3.3 Business Participants
The international aviation industry has grown to an enormous size. The participants now are also faced with enormous tasks. Huge amounts of money are involved. Airports handle billions of dollars of equipment every day. With all this enormity of scale comes an commensurate increase in accountability and responsibility. The players remain much the same, but the stakes have changed.
Who are the industry players?
- Aircraft manufacturers.
- Aircraft operators.
- Airport operators.
- Insurance companies.
- Crew, both ground and air.
- Aircraft flight planners and dispatchers.
- Traffic services-passenger handling.
- Loaders-cargo, baggage and mail.
- Maintenance-heavy (Hangar) and line.
- Travel agents and ticket handling staff.
- Freight forwarder and agents.
- Ground equipment manufacturers.
- Aircraft re-fuelers.
- Air Traffic Management providers.
- Customs, immigration and quarantine services.
- Accident Investigators.
- Crash, Fire and para-medic crews.
- Airport facilities and maintenance.
- Security services.
- On-airport retailers.
- Airport ground transport service providers-trains, buses, vans and taxis.
- Global communications, navigation and surveillance providers.
- Flight safety foundations and bodies.
- Aviation training establishments.
- In-flight catering.
- Safety equipment manufacturers.
This is not a complete, list but it does give an impression of all the people and organizations that are affected by a single aircraft hull loss.
Heavy Lifting, Inc.’s aircraft weight and balance weigh bridge offers one small flight safety input that could have a huge impact on accident rates and hull loss numbers, not to mention the cost of human lives saved by timely intervention following the alert of an overweight or out of balance aircraft.
4.3.4 Distributing a Service
Distribution of aviation weight & balance systems at present doesn’t currently have a pattern – there are no comparable products. Initially the order rate will be small, and controllable. However, once the first two (2) Heavy Lifting systems are in service, and airport management and air traffic services realize the benefits to their operations of the Heavy Lifting product, we anticipate that demand will exceed supply very rapidly.
The task will be to be able to produce the product at a consistently high quality level and still meet the market’s demands. Heavy Lifting, Inc. prefers a sustainable growth rate rather than a too rapid implementation of the Heavy Lifting concept into the aviation industry. The planned growth rate is achievable.
To achieve multiple sales in different regions of the world, distribution will have to be de-centralized. We see issuing manufacturers licenses in the state of sale as the only practical way to keep the momentum of construction and installation going. Some elements, say load cells, data transmission hardware and software, can easily and economically be sourced from California.
We will not have long lines of distribution or supply of parts, nor carry large stocks of inventory. Parts will be manufactured for a specific job and on-site contractors will be used wherever possible. The expertise of engineering, data use and system concept will be provided by Heavy Lifting, Inc. from California or one of the company’s future regional offices.