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The Front-Office Panel Makeover

Consider this: By the time you read these words the FAA offers pilots nearly 3,500 commissioned LPV approaches; you know, ‘Localizer Performance with Vertical guidance’, those three-dimensional arrival procedures based solely on the Wide Area Augmentation System (WAAS). According to the FAA those nearly 3,500 runway ends populate 1,690 airports. A list of 404 airports boast localizer-performance approaches exceeding 550 runway ends.

Dave Higdon   |   19th September 2014
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Dave Higdon Dave Higdon

Dave Higdon writes about aviation from his base in Wichita Kansas. During three decades in...
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The carrot and stick arguments for an upgrade. 

Consider this: By the time you read these words the FAA offers pilots nearly 3,500 commissioned LPV approaches; you know, ‘Localizer Performance with Vertical guidance’, those three-dimensional arrival procedures based solely on the Wide Area Augmentation System (WAAS). According to the FAA those nearly 3,500 runway ends populate 1,690 airports. A list of 404 airports boast localizer-performance approaches exceeding 550 runway ends.

Of course, all that satellite- and groundbased science may as well be from an episode of Star Trek for all the good it provides aircraft lacking a TSO'd WAAS GPS navigator, with the approved installation needed for legal use in Instrument Meteorological Conditions (IMC). Runway ends lacking other precision options (and even less-precise WAAS GPS options) will all become inaccessible to such operators at one time or another. And the numbers of available runways will continue to shrink, significantly, on the FAA's approach to NextGen.

Consider: every time an airplane fails to get in on a localizer approach – when WAAS GPS likely could have – the trip invokes costs beyond those of the successful arrival. Yet we've heard operators and owners express their reluctance to upgrade with the necessary avionics “because we already have all the capabilities we need”.

That’s as may be - such owners often continue to maintain ADF receivers though they don't fly outside the US. And they often have older GPS navigators capable of guiding the aircraft through a GPS overlay approach for the NDB. If you are one such owner, however, we re-emphasize: runway options available to you will shrink as NextGen approaches. Conversely, updated avionics offer ways to increase your aircraft's utility –not merely to hold it even – and pay-off operationally.

Microprocessor Wise, Transistor Foolish

The first-line ‘push back’ heard in discussions of panel upgrades seems to focus on the upfront costs, to the exclusion of other considerations. The beneficial aspects of a WAAS navigator, for example, factors in every time the LPV approach saves the flight from a diversion. Depending on the installation, it can also help an aircraft meet standards for Performance Based Navigation (PBN)

Area Navigation (RNAV) and Required Navigation Performance (RNP) make up PBN and describe the ability of an aircraft to navigate under performance standards. The RNAV aspect enables aircraft to fly on any desired flight path within the coverage of ground or space-based navigation aids – that is, within the capability limits of the on-board systems, or a combination of both capabilities.

Using RNP requires RNAV with the addition of on-board performance monitoring and alerting capability. A defining characteristic of RNP flying comes from the ability of aircraft navigation systems to both monitor its own performance and alert the flight crew should the aircraft stray from the performance requirement during an operation. The performance requirements of PBN are conveyed to the operator through navigation specifications that define the degree of precision required: RNAV 1, RNP 1, RNAV 2, RNAV 5, RNP 10, RNP 4 as well as RNAV (GPS) and RNAV (RNP) approaches.

So what does the above have to do with the economics of upgrading a panel on an older aircraft? If it is possible to meet one of these standards, savings in time and fuel spent - both en route and maneuvering for approach - can add-up quickly. And there is the ability to access some runway ends otherwise unavailable via an ILS or LOC Approach. The FAA's Performance Based Navigation Dashboard (www.faa.gov/nextgen/pbn/dashboard/) shows the airports and use of these standards. As NextGen continues to advance look for ever-more spots to show up on the map you see.

Pennies Saved My Be Spent Later...
Modern avionics are not exactly maintenance free. Nothing is in aviation, level of participation notwithstanding. Any avionics technician can attest to the reality that some electronics and mechanical components deteriorate over time, typically meaning more maintenance, and the potential for more-frequent delays or cancellations because the airplane is “in the shop again”. Thus, one element to consider when weighing the costs of a panel makeover can come from examining the past few years of maintenance costs for the avionics and electronics.

That is not usually at the front of the mind, however, when a decision-maker only sees the dollar signs for the upgrade in isolation from all other factors. The sophistication level of the stack and its capabilities may be a factor when the upgrade options serve to simplify both operational and maintenance needs, however, particularly when replacing glass cockpit stacks still based on 20th Century cathode ray tube (CRT) display technology, where an upgrade may also help boost the useful load of the aircraft (equating to extra carrying capacity, courtesy of the lighter weights of so many retrofit systems).

Seldom does a pilot or owner ruminate over having excess carrying capacity. And every 6.76 pounds taken out in a panel upgrade translates into another gallon of Jet A the aircraft could carry. For every pound shed in the upgrade, another pound can go into the airplane elsewhere (cabin, luggage, etc.). When an operator begins to learn the benefits available from a panel refurbishment, spending those precious dollars becomes far more palatable.

Making Cents of a Sensible Decision
Business aircraft operators enjoy the benefit of depreciating the costs of a panel upgrade at tax time. The net effect: A reduced final cost for the work. The company or individual's tax accountant can help define the limits and guidelines for employing depreciation to the company aircraft. With bonus depreciation those benefits can be reaped very quickly – or, alternatively, stretched over the more-typical depreciation schedule.

The ultimate decision needs the informative participation of a tax accountant. But regardless of the time-frame used and the level of upgrade, the tax benefits serve to reduce both tax liability and the net costs of the panel makeover. Here's where the news gets a little better than in recent years:

• First, lenders today increasingly view older aircraft as less risky prospects than at the peak of the great recession a few years back.
Second, so many options are available to renovate business turbine panels, and lenders are more eager to help out – even for older aircraft past the 20-year mark (and even for some of the fleet older than 30 years).

• Third, the financing costs of upgrading the aircraft are typically deductible along with the capital costs for the system. And with terms today more flexible than in recent years – and with interest rates still uncharacteristically low – a window stands open to those willing to move before the window closes.

Evaluating the project with all the number- considerations in view can help assuage any fears held by the CFO.

Future Flight: Keep Up or Fall Behind....

Changes coming through NextGen implementation provide something of a catalyst, regardless of how unwelcome such spending might be, if the operator wants the aircraft to remain viable and efficient in the future airspace system. For an outline to a staged approach to becoming NextGen compliant, see ‘NextGen: How Will You Manage the Transition?’ on p82 of this edition.

The ADS-B Out mandate takes effect in 2020; FAA officials made clear at several recent appearances that the proliferation of new solutions at various cost levels satisfies them that no implementation delay is needed – meaning, essentially, that it's up to operators to beat the deadline.

And avionics shop owners already warn against waiting until 2018 or worse, 2019 to make the move. “[Such operators] likely will find the queue ahead of them stretches into mid-2020 or beyond,” the owner of a Midwest avionics shop told AvBuyer Magazine. “We're only now starting to hear from customers about updating their old jets or turboprops – and we're putting them on a list and getting to them as fast as we can… But that list grows a little longer every quarter.”

Still, such a decision demands consideration of one more factor: How long the operator/owner expects to keep the aircraft in question.

“If the owner plans to trade or sell inside the next couple of years, we like to talk to them about what they plan to do to replace it,” added an avionics shop foreman in Florida. “We'll do whatever they want, and if it's an upgrade that they expect will make the airplane more valuable or easy to sell, we try to explain that the theory doesn't always work...” The aircraft being upgraded needs to be kept for at least long enough to take advantage of the full depreciation available, various operators counsel. “Still, you can't count on getting back out, dollar-fordollar, what went into even a recent upgrade,” the foreman added.

Another avionics shop operator takes a different view, however. “If the aircraft is destined to be sold any time within four years of an upgrade, then consider shopping for an airplane already equipped as desired – or, one that meets the changing mission that you can upgrade to your needs.”

In the long term, he concluded, the panel upgrade is a value leader that benefits the operator on many levels, and which can increase mission-completion rates from the very start. “The performance options, the alternative approach options, the reduced maintenance – and the lower demand on the electrical system...what's not to like?”


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