• JUNE 10, 2009, 12:00 P.M. ET

The article is published at noon - and POP! Also, included another
paste of the article (which hopefully copies a bit more legibly - but
included the urhl in case it doesn't).

CANADA VENTURE: Stars Aligning For AeroMechanical Svcs

   By Monica Gutschi 
Of DOW JONES NEWSWIRES 

from: http://online.wsj.com/article/BT-CO-20090610-710386.html

TORONTO (Dow Jones)--You could say the stars are aligning for AeroMechanical Services Ltd. (AMA.V).

The small Calgary-based firm makes a device that allows flightcrews on aircraft to communicate directly with ground support at anytime from anywhere in the world. The device also transmits real-timedata on the state of the aircraft, including fuel usage, pressurelevels, and engine condition.

That information is handy to have at any time, but will becomeespecially so in the next few years as airlines move to comply with newEuropean Commission rules on greenhouse-gas emissions. There are alsoEC rules in the works that will require aircraft to have the ability tosupport data-link services. And the recent tragedy in which an AirFrance plane disappeared over the Atlantic Ocean has highlighted thegaps in the widely used ACARS, or Aircraft Communication Addressing andReporting System, raising interest in AeroMechanical's unique product.

"We believe that, had AeroMechanical's AFIRS unit been present onthe aircraft, either as the primary communication source or used inconjunction to ACARS, it may have been able to provide the actualcoordinates of the plane," Jacques Kavafian of Research Capital said ina recent note.

Kavafian or a member of his family own shares or options ofAeroMechanical and Research Capital has an investment-bankingrelationship with the company.

In contrast to ACARS, which normally requires aircraft to have adirect sightline to a series of transmission towers, AeroMechanical'sAFIRS - or Automated Flight Reporting Information System - uses theIridium network, a group of 68 satellites spanning the globe.

Richard Hayden, AeroMechanical's president, notes there are noACARS towers, nor conventional satellite coverage, over the North Pole,and limited coverage over Africa, India and parts of South America.While some aircraft can broadcast ACARS via satellite, the system isn'tas flexible as AFIRS.

Rob Giguere, president and chief executive of Skyservice Airlines,one of Canada's largest charter airlines, said in a recent letter thatAFIRS has given his company "improved confidence in all of ouroperational systems, communications and flight planning processesresulting in increased fuel savings and consequent reductions inemissions."

Hayden says interest in AFIRS has soared since the EC published itsnew rules. Under EC's Emissions Trading Scheme, airlines will have topay for any greenhouse-gas emissions they emit above a pre-determinedlevel, which is likely to be lowered over time. The looming 2012deadline now has airlines "in a panic," Hayden says.

AFIRS will not only report how much fuel remains on board, but also"how much they could have saved if they operated the aircraftdifferently," Hayden says.

Small changes in taxiing, altitude, aircraft weight and so on canall affect how much fuel is used. Fuel typically represents 35-45% oftotal operating costs and Hayden says AFIRS can help airlines savebetween $20,000 and $300,000 per aircraft per year.

The growing interest is showing up in AeroMechanical's financials:revenue rose 60% in 2008, and quadrupled in the first quarter of thisyear. Although the company continues to lose money, its margins areimproving as its recurring revenues from installed products rises.

AeroMechanical now has 31 customers, including commercial carriers,cargo airlines, and those that fly special missions such as UnitedNations relief flights.

Company Web Site: http://www.amscanada.com

Monica Gutschi, Dow Jones Newswires; 416-306-2017; monica.gutschi@dowjones.com