Vaisala, in a news release last Wednesday (http://www.vaisala.com/en/press/news/2016/Pages/Page_1985107.aspx), announced its intention to divest itself from the U.S. Automated Weather Observation System (AWOS) business, a move that caught many by surprise. Vaisala, an international provider whose core business is environmental measurement, especially weather measurement and chosen industrial measurements, is a major AWOS provider in the U.S.
In addition to the U.S. AWOS business, the announcement stated that the Transportation business unit will exit the field service business in all countries except the United Kingdom, citing that the company’s field service offering is no longer competitive in the market due to increasing price pressure. The U.S. AWOS is based on unique technology designed solely for the FAA regulated small airport markets which differs from Vaisala’s common technology platform.
Wednesday’s announcement has users of Vaisala equipment scrambling. A number of state aviation officials, whose states are heavily invested, told the SAJ that they will be reaching out to Vaisala officials this week to determine the status of their contracts and support.
Vaisala’s intention is to find a partner willing to assume the business. “We prefer to divest these businesses to parties, who could offer continuity to the employees and are better positioned to further develop the business,” said Antero Jarvinen, Head of Transportation Business Unit. However, should this not be possible, Vaisala does plan to close down these businesses during this year.
Although, according to the release, the FAA and U.S. airports remain important weather instrument customers for the Transportation business unit, their International Civil Aviation Organization (ICAO) AWOS business outside of the United States is not affected by this change.
As Vaisala exits the U.S. Non-Fed AWOS business, Dan Donahue, Strategic Account Manager, here in the U.S., said their policy is “No Customer Left Behind.” “Our most important goal is to keep our customers satisfied throughout this transition period.”
Donahue said they plan to honor all existing contracts and commitments where possible and work with clients to re-distribute relevant business to their partners. “Service and support functions will continue with business as normal until such time that these activities are successfully transferred to a partner,” said Donahue.
These changes, however, are expected to lead to a reduction of approximately 60 full time equivalents mainly in the United States. Estimated annual cost savings are EUR 6 million. The savings are expected to contribute to 2017 profitability. The related one-time costs will be reported in the first quarter 2016 Interim Report and are estimated to be EUR 3 million.
Donahue said all weather instruments remain in normal production and are fully supported and serviced and Vaisala will retain a core of service experts to support and train our customers and partners and provide high quality technical services.
“We believe that working more closely with service partners and providing better support to them will be in the best interest of our customers in terms of service and quality,” said Donahue. “These changes will allow us to simplify our operations and concentrate on our profitable core offerings and expertise.”
It’s the high cost of services that has had some state officials worried, citing upwards of $10,000 to recertify AWOS inspectors. And, who will the service partners be? One seasoned veteran of the automated weather business told the State Aviation Journal that this will be an interesting process. “It certainly has everyone talking.”
David Wartofsky, CEO of Potomac Aviation Technology Corp, distributor of Micro Tower, referred to the news as sad. “Only the collaborators remain, and the innovators have all left. It’s a sign of the times.”
Wartofsky, who has been critical of the FAA’s over-burdensome certification process of AWOS and perhaps key to the unprofitability cited by Vaisala, said he has taken a few DGCA’s (Director General of Civil Aviation) flying in his Skymaster out of Potomac Airfield in Maryland. “One DGCA I took flying (a major ally of the USA) said later over dinner, “the world is leaving the FAA behind. It has become too outdated, too cumbersome, and impossible to get anything done. The world is moving instead to guidance from EASA and ICAO.”
Wartofsky said the FAA, airport consultants, and others, have collaborated themselves with so much make-work, it’s taken them into the dustbin of history – “And the USA loses in the end.”
