Why Aircraft Finance Professionals Need to Pay Attention to January 1, 2020

by Alexander Craig

Craig is co-founder and managing director of AvRisk. He has more than 30 years of executive leadership experience in aerospace, information technology, insurance and manufacturing. His corporate career includes senior executive roles at a number of large and mid-size companies including: Honeywell International, Rockwell International, Williams International, Raytheon, Federal Signal Corporation, and Progressive Insurance. Craig has also been CEO of a number of start-up companies including: Craig Research, BELIEVEin, Stratos Aircraft, ECCO Systems, and AvRisk. Early in his career Alex was a management consultant with McKinsey & Company.

Alex holds a BS Degree in Computer Science and Electrical Engineering from Michigan State University, and a MBA Degree from Wayne State University. Alex is an active pilot and holds Air Transport Pilot and Certified Flight Instructor certificates. Alex is a certified Lean & Six Sigma Greenbelt.



On January 1, 2020 all aircraft, including business jets, that operate in U.S. airspace will need to have a certified ADS-B out system. Why should you care? As Alexander Craig of AvRisk explains, retrofitting aircraft will cost somewhere from $5,000 to $1 million, which could in turn affect values for leasing and financing.

What is ADS-B?

Automatic Dependent Surveillance – Broadcast (ADS–B) is a surveillance technology in which an aircraft determines its position via satellite navigation and periodically broadcasts it, enabling it to be tracked. The information can be received by air traffic control ground stations as a replacement for secondary radar.

As of January 1, 2020 all aircraft that operate within U.S. Airspace where a Mode C transponder is required now will need to have a certified ADS-B out system1. Figure 1 depicts the airspace where ADSB out is required. Almost all of the General Aviation aircraft in the U.S.A., from single engine piston, to multiengine jet aircraft operate within this airspace.

Figure 1. Source: FAA

ADS-B Out Solutions

ADS-B Out solutions come in two flavors: 1) Universal access transceiver (UAT), and 2) 1090 Extended Squitter (1090 ES). As may be seen in Figure 1, the UAT system is limited to below 18,000 feet. Also, no country outside the U.S. has accepted the UAT solution. High performance aircraft including all turboprop and jet aircraft that operate above 18,000 feet will need the 1090 ES solution.

ADS-B In

ADS-B In provides almost real-time data back to ADS-B Out equipped aircraft. There are two important data types: 1) Traffic Information System – Broadcast (TIS-B), and 2) Flight Information System – Broadcast (FIS-B). TIS-B provides data on all aircraft within the vicinity. FIS-B provides flight information data including weather, TFR, and other data. Both TIS-B and FIS-B data may be displayed on an aircraft multifunction display (MFD) or using an Electronic Flight Bag (EFB) app available for Apple iOS and Android devices.

It is important to note that as of an update to TIS-B in 2015, TIS-B data is only broadcast to ADS-B Out equipped aircraft. This means inexpensive, non-certified ADS-B receivers, like the Stratux only receive “piggyback” TIS-B broadcasts when sent to other ADS-B Out equipped aircraft. Thus, there may be additional aircraft not displayed on the EFB coupled to the Stratux. Visual See and Avoid is still required for all pilots.

What Will ADS-B Cost?

ADS-B implementation costs vary widely, from approximately $5,000 for a single engine piston to potentially over $1M for a business jet. The FAA has created an ADS-B Rebate program for single engine piston aircraft to help subsidize implementation cost.

Will FAA Change the ADS-B Requirement Date?

No.

Summary

It is highly recommended to implement both ADS-B Out (mandate) and ADS-B In together. Many of the available solutions are integrated ADS-B In and Out. Several alternatives include Bluetooth or Wi-Fi connectivity options for an EFB.

As of May 1, only 31 months remain. Many avionics and MRO shops already have a growing backlog for upgrades with waiting lists now exceeding 6 months. This author believes that the cost for ADS-B implementation will not go down as January 1, 2020 gets nearer. Implementation cost may actually go higher as competition for installation slots gets worse. Shops in Europe are already charging a premium just for a shop reservation date!

Please feel free to contact the author at acraig@avrisk.net with questions or comments, or for assistance with your ADS-B implementation.

Footnotes

  1. Small aircraft with no electrical system are exempt from this requirement.  Aircraft that are operated exclusively outside airspace depicted in Figure 1 are also exempt from this requirement.

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Terry Mulreany
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