Aspen Avionics, Honeywell Partner

April 29, 2011 | Reprint from New Mexico Business Weekly; by Kevin Robinson-Avila

Aspen Avionics Inc. and Honeywell International have signed an agreement to jointly develop and sell a new GPS navigation system for general aviation aircraft.

Honeywell will pay Aspen $5 million to build and certify the system, said Aspen President and CEO John Uczekaj.

“Honeywell will pay us to develop it by late 2011,” Uczekaj said. “We’ll work together to market it starting in 2012, and we’ll share sales revenue.”

Albuquerque-based Aspen makes digital flight displays for general aviation aircraft to replace analog systems with modern cockpit panels at an affordable price.

Since launching in 2004, the company has received about $30 million in private equity from venture capital firms, including about $8 million from the New Mexico State Investment Council.

The partnership with Honeywell could propel Aspen to a new level in the general aviation market, said Brian Birk of Sun Mountain Capital, which manages the SIC’s private equity program.

Honeywell is a publicly traded, global aerospace and technology corporation with $33.4 billion in revenue in 2010.

“This is an important deal for Aspen,” Birk said. “The company already has a high profile in the general aviation industry, but this partnership will help it increase its market penetration and broaden its product portfolio.”

For Honeywell, Aspen brings needed agility in product development, said John Todd, vice president of business and general aviation.

“Aspen Avionics is known to be a very innovative company,” Todd said. “That’s something we need, because we’re a big company and sometimes we’re not as nimble and quick as we could be. We want to start selling the new system in 2012, and this is a cooperative effort on both sides to achieve that goal.”

Aspen sells multifunction digital panels, or glass cockpits, that are essentially plug-and-play devices it developed for plane owners to rapidly modernize aging general aviation aircraft.

Aspen’s flight displays offer information on altitude, air speed and weather, plus navigational data to increase a pilot’s situational and terrain awareness. The data includes photo-quality moving maps and traffic displays.

The new product will provide a touchscreen GPS navigation system to replace previous controls and upgrade planes that don’t have GPS, Uczekaj said.

“Most general aviation planes don’t have these systems, and the ones that do are usually very old,” Uczekaj said. “The new technology will allow precision GPS approaches for small aircraft.”

The Honeywell partnership could help Aspen grow its revenue by 50 to 80 percent this year, Uczekaj said.

Company sales grew from $7.2 million in 2007 to $10 million in 2009, but revenue remained flat at $10 million last year. In part, that’s because the Federal Aviation Administration has taken longer than anticipated to certify a new flight display system for helicopters that Aspen developed.

But Aspen expects that certification in the next few months. In addition, the company has received FAA approval to sell its multifunction displays for class III craft, which weigh between 6,000 and 12,000 pounds and are generally used as commercial “working” vehicles. Before, the company could sell only to class I and II aircraft under 6,000 pounds.

“We expect to hit between $15 and $18 million in revenue this year,” Uczekaj said. “Next year sales will grow even more because we’ll begin selling the product that we’re developing with Honeywell. I expect revenue will be north of $20 million in 2012.”

The Honeywell deal means more jobs at Aspen. The company employs 68 and plans to hire at least seven more by midyear.

Uczekaj’s prestige in the aviation industry and his status as a former Honeywell executive helped land the new partnership agreement, Todd said.

In the 1980s, Uczekaj led avionics modernization programs at Honeywell. He was vice president for marketing and sales at its business commuter aviation division in the 1990s. He headed the avionics division after Honeywell merged with AlliedSignal in 1999 and joined Aspen in 2007.

“John has a good rapport with a wide number of CEOs, and he’s well respected across the industry,” Todd said. “His leadership at Aspen Avionics enabled us to get this partnership accepted throughout Honeywell.”

krobinson-avila@bizjournals.com | 505.348.8302