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AVTECH: Great news for future contracts

In our latest research update, we wrote that an agreement with Norweigan Air Shuttle is most imminent. Today AVTECH announced a “Letter of Intent” with Norweigan Air Shuttle. We still expect a signed commercial contract in Q4 2018 at earliest.

Norweigan Air Shuttle has a fleet size of 54 airlines. The new “Letter of Intent” was possible due to the positive results from an evaluation study of the environmental impact of Aventus products that was communicated in April. The purpose of the project has been to reduce emissions, and associated environmental impact (CO2emissions) from airliners and AVTECH was granted financing (in part) from the Swedish Energy Agency in 2016. The project has run from October 2017 and April 2018 in collaboration with Norweigan Air Shuttle.

In our latest research update, we also speculated about the new product “Aventus AIR” and wrote that the new product is highly likely a result of an experienced demand from discussions with prospects. The “Letter of Intent” involves both Aventus Nowcast Full Flight and Aventus AIR.  The Aventus AIR product is very similar to Aventus Nowcast, with the big difference that the service allows wind forecast to be sent directly to the ACARS printer.

This “Letter of Intent” will not change our estimates for 2018-2020. In 2019 we expect revenue growth of 58% with an EBITDA of SEK 5.5 million. We believe this  “Letter of Intent” also increases the likelihood of a potential contract with Lufthansa Group.

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