4
First Quarter 2014
Industry Trends
(Aerospace)
Source: Facebook white paper “Connecting the World from the Sky”; Boeing and Airbus Public Filings; Industry Newswires
Unmanned Aircraft Systems (UAS) continue to expand in size and capability, ranging from the massive surveillance
and strike platforms able to land on an aircraft carrier to hand launched systems. Until recently, UAS application
beyond defense and security remained limited. Thanks to advances in High Altitude Long, Endurance (HALE) design
and solar power, UAS will now be able to function as atmospheric satellites, serving as low cost, mobile internet
providers to developing and rural regions where satellites are only able to offer slower, limited coverage. Solar
technology will allow the aircraft to stay aloft for months, even years while being controlled from the ground. Most
importantly, the new designs operate above FAA regulated airspace – Class A airspace ends at approximately
60,000 ft. Mean Sea Level (MSL) – bypassing the cumbersome regulations dogging UAS application potential in
commercial airspace. Meanwhile, the FAA is working to address UAS operation in commercial applications. Earlier in
Q1, the FAA selected six research and testing sites to study operational issues for commercial UAS applications.
However, with actionable policy still years away, the long-term, high altitude flight capability represents a crucial,
near-term growth opportunity for the industry.
According to a recent Facebook whitepaper, roughly 2.7 billion people globally have internet access. That is little
more than one third of the current population and access is growing only 9% annually. Recognizing UAS
technology’s potential to drive internet access, both Facebook and Google have made acquisitions in a new race for
sub-space supremacy. Facebook acquired UK-based Ascenta Limited for $20 million at the close of Q1 and Google
won a bidding war to acquire New Mexico-based Titan Aerospace just after Q1’s close. Ascenta is a small
engineering team founded by creators of the early generation Zephyr, the world’s longest flying solar-powered UAS
to-date. Ascenta team members will join the Facebook Connectivity Lab’s newly minted team of experts in aerospace
and communications technology recruited from NASA’s Jet Propulsion Lab and Ames Research Center. Meanwhile,
Titan boasts UAS designs able to ascend to 65,000 ft. MSL and remain airborne for five years without landing or
refueling. Both acquisitions are viewed as critical steps in the companies’ goal to bring affordable internet access to
the world.
UAS Acquisitions
Ascenta
Limited
Est. EV $20M
ACQUIRED
March 27, 2014
April 4, 2014
ACQUIRED
Est. EV $60M
03/31/14
A320 Family A330/A340/A350 A380
5,521
4,247
1,078
196
Company
as of
Unfilled Orders by Aircraft Model
Totals
03/31/14
737
747
767
777
787
5,154
3,794
52
49
360
899
Major Commercial Aircraft Backlog
Boeing outpaced Airbus in new aircraft deals for Q1 following the
finalization of an Air Canada order for 61 narrow body jets. Boeing
reported 275 gross orders or 234 net orders in Q1. Meanwhile, Airbus
ended the quarter with 158 new orders or 103 net orders after
adjusting for cancellations. Overall backlog for Boeing and Airbus
grew roughly 1% and cancellations for both planemakers ran at similar
levels.
