Honeywell International’s (HON) auxiliary power unit has been chosen by EasyJet Airline Company Ltd, which has also extended a maintenance contract for Airbus A320s in a 10-year contract worth $51 million. The contract includes 180 Airbus aircraft operated by EasyJet plus 53 aircrafts planned for delivery by 2013.
The benefits of Honeywell’s auxiliary power unit (131-9A) are lower fuel consumption of up to 5% and 25% savings on maintenance costs. It is most widely used in single-aisle aircrafts meant for commercial operations and is currently mounted on 1,700 air planes. The unit can run for 10,000 hours on an average between two consecutive repair activities.
The company will also provide Atlant Soyuz its full avionics suite, for four Boeing B737-800 aircrafts to be delivered through 2011, in a contract estimated at $7 million.
Honeywell’s solutions help optimize airline efficiencies by reducing weight and space requirements, automating some of the pilot’s work thereby necessitating lesser training man-hours and costs.
Honeywell’s attractive collection of businesses has the potential to earn consistently above-average returns. The company’s focus on working capital management, free cash flow generation and balance sheet strength remain positive attributes in the current weak environment.
The company is a global leader in refrigerants, aerosols and foam-insulation blowing agents used to replace ozone-depleting Chlorofluorocarbon and Hydro chlorofluorocarbons. These same products also improve the energy efficiency of homes, appliances and commercial refrigeration systems.
The company’s proactive restructuring initiatives have positioned it to navigate better than many of its peers, but we are yet to see signs of stabilization in a number of its major end markets.
The company’s Aerospace segment is a global leader and provides integrated avionics, engines, systems and service solutions for aircraft manufacturers, airlines, business and general aviation, military, space and airport operations.
Honeywell is a diversified technology and manufacturing company, serving customers worldwide with aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals and energy efficient products and solutions for homes, business and transportation.
We currently have a Neutral recommendation on Honeywell.
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