BendixKing has introduced a new Avionics-as-a-Service plan that allows aircraft owners to upgrade their avionics via a monthly subscription instead of an outright purchase.
The company compares it to buying a cell phone plan that includes a phone.
The new subscription plan will be available for many BendixKing products, including AeroVueT, AeroVue Touch, xVue Touch, KSN 770 navigator, AeroWave satellite communications system and the MST 70B transponder with ADS-B Out.
Similar to a cellular plan that includes a new mobile phone, the subscription will include avionics equipment, installation at an authorized BendixKing dealer, equipment repairs, software updates, databases and navigation charts, as well as technical support, BendixKing officials say.
Instead of paying a flyaway cost of $20,000 or more to purchase and install a single flight display, Avionics-as-a-Service would allow the owner to pay a monthly fee of about $400 a month, according to company officials.
“Cost has always been a barrier to upgrading avionics; it can cost thousands of dollars considering the purchase of equipment, price of installation, and other significant expenses such as maintenance and repairs,” said Gregg Cohen, BendixKing president. “With the introduction of our Avionics-as-a-Service option, BendixKing is working to make the latest technologies affordable for all aircraft owners.”
Sounds like a good idea, but the devil is going to be in the details. It will be similar to a second mortgage on a home if the airframe itself has any existing financing. BendixKing will be named as an additional loss-payee on the insurance, and if the check from the insurance company doesn’t pay off all the lien holders, you can bet BK’s lawyers will be looking to the aircraft owner. Avionics used to not change much over the years, but nowadays they change a LOT, QUICKLY, and last year’s $20,000 package is considered obsolete and having negligible value (even though it still works just fine). I wish they hadn’t made the analogy to cell phones, because do you really know ANYONE who is happy with their cell phone company and the one-sided contracts you get from them?
While the appeal of fresh, modern avionics is undeniable, I’m very nervous about the terms and conditions. I’m sure there will be a credit check as well, and every inquiry on your credit report lowers your score for a while. There’s also the problem with who provides the actual financing. If BK is doing in-house, that’s one thing, but if they are selling the paper to a third party (so-and-so bank), the third party becomes the holder in due course and if the equipment doesn’t work or breaks down, while BK will likely fix it, you owe the payments anyway and have no leverage with the vendor. (Just like financing a car – the bank expects to be paid whether the car runs or not.)
Having been a mortgage broker for over 20 years and being married to a lawyer has taught me a few things about finance and the interesting ways things can go sour. I’d want to have a REALLY close look at that contract, and while I am looking, I will remember that the large print giveth, but the small print taketh away.
Be careful . . .