New developments for 2010

bring extra performance, major

cost reductions, simplified
operational procedures and a
positive investment return
within months.
The Sat-Tag global asset
tracking system is exclusively
developed for use in the
Aviation Industry using its
unique control system
‘SaFeOnBoard’ designed for
regulatory approval.

Each Sat-Tag device stores 1000s of locations including the perimeters of over 1,650 airports worldwide

Globally Optimised Asset Location

Industry determines the way forward
In 2009 Sat-Tag continued to assess non powered
asset tracking priorities for the aviation industry.
Focussing primarily for the need to track ULDs
(containers and pallets) but also bringing all non
powered assets into consideration, the main areas of
researching the market have centred on:
• Running Costs
• Cost Savings
• Incremental Revenue
• Operational Procedures
• Operational Benefits
• Tag Performance
• Location Identification
• Effective Asset Management
Running Costs
Any potential benefits from tracking ULDs, dollys,
catering trollies have to be seen in the context of the
running costs.
These are determined by the cost of the tracking
device and communications which include outbound
positional reports from the tag and inbound “where
are you” requests to the device.
Initial indications in 2008 suggested that an all-in cost
of $10.00 per month per asset would be needed to
provide global ULD tracking. Research over the last
18 months has shown that the majority of Airlines
require a substantially lower figure to justify
investment in asset tracking.
Market conditions mean that a commitment to
tracking a ULD fleet must see a positive financial
return well within 12 months.
Sat-Tag has been able to achieve this by introducing
GPRS to convey messages. This has substantially
reduced the production cost of the tag as well as
providing lower communication costs. Overall savings
of over 50% have been achieved since 2008. The
following table illustrates the monthly tracking cost
for an airline with a 10,000 unit ULD fleet.
Messages Global Message Inclusive cost per
Number of
per month Plan Data month based on 5
assets
consumption year agreement
10,000 1,500,000 150 megabytes $50,000
Cost Savings
Reducing operational costs is a major priority for the
industry. Investment in new systems which on paper
might achieve savings can only be considered if a
positive return can be seen within months of
introduction.
The benefits of being able to track an entire ULD
fleet on a constant basis are substantial.
Major reductions will be seen in:
• Outright loss of assets
• Unrecorded losses for + 48 hours
• Buffer stock
• Resources used to locate assets
• Arrival & Departure turn round time
• Interline Management procedures
• Security
• Fleet Management & Optimisation
Fully tracking a ULD Fleet will also make a
contribution to reducing overall baggage losses which
cost the industry $2.5 billion in 2009.
Incremental Revenue
Providing comprehensive asset tracking will allow
cargo sales teams to offer customers in the high value
and dangerous goods markets a door to door service
with the advantage of genuine consignment tracking
as a premium service.
Fitting the tag to the ULD means that the only
limitation for position reporting is when it is in transit
on the aircraft – this is covered by ensuring a report is
sent on loading and unloading. At all other times the
tag is able to report its position and is not dependent
on being scanned at pre-determined gateways.
Operational Procedures
The key to successful deployment is minimal
interference to the existing asset management
structure. Once installed – which is a single person 30
minute procedure – the tag is ‘paired’ to the specific
ULD identification code. From that point onwards all
reports are listed as the ULD Ident. Equally,
operations can send a ‘where are you?’ message
addressed to a specific ULD.
The only requirement for human intervention in the
tag operation is battery replacement. Sat-Tag is now
able to offer up to one year’s battery life for its
Global Communication plan which allows up to 5
outgoing messages every 24 hours. However the
number of messages can be increased but the battery
replacement time is reduced.
Each airline will have different operational
requirements. The solution will be a trade off
between messaging requirements, battery capacity
and inspection intervals.
Once a plan has been selected, the tag is
programmed to limit its outgoing messages. However
it can receive unlimited ‘where are you?’ requests
which do consume power. If battery performance is
shortened an alert message is sent giving 7 days
notice for replacement.
Overall, Sat-Tag has been able to establish a tag
specification which meets the industry’s requirement
for minimal additional resources to manage the
introduction of a ULD fleet tracking programme.
Operational Benefits
ULD Losses: It is widely recognised and
acknowledged that the average outright ULD loss
ratio is 2% each year and need to be replaced
annually.
Absolute losses mostly occur when a ULD transfers
from one airline to another and off airport via a
freight forwarder. Over time this increases the
airlines’ capital expenditure requirements. By
tracking 100% of the fleet (airside and off airport)
such losses can largely be eliminated thus avoiding
the need to replace.
Buffer Stock: In addition to absolute losses it is
common for an airline to experience short term
‘losses’ where ULDs will be on airport but are
unrecorded for more than 48 hours. Together with
the absolute losses, airlines operating at multi-sector,
multi-airline hubs can have in excess of 15% of their
ULD fleet unavailable for use at any point in time.
Airlines have traditionally overcome this by carrying a
buffer stock of ULDs or interlining when necessary. By
tracking all assets and vastly improving the planning
and utilisation of its ULD fleet an airline can all but
eliminate its buffer stock.
Manpower: A significant amount of manpower
resource is vested by airlines in tracking and
monitoring fleets of ULDs. It is common practice
among the more efficient ULD operators to carry out
a weekly audit airside to record the total number and
whereabouts of each ULD. Sat-Tag tracking ensures
that each ULD, by type, can be located centrally and
locally simply by querying the operational cargo
management programme.
Retrieval of missing ULDs then becomes a science
based on known fact rather than an exercise in time
consuming detection.
Fleet Utilisation: A ULD fleet will typically contain
approximately 40% containers and 60% pallets. This
mix varies according to the nature of the airline’s
aircraft, customers and route network.
Indeed within the fleet of containers and pallets
there are also several variants designed for different
types of aircraft and freight.
Customer demands to move freight from A to B, often
at short notice and aircraft availability, will
determine the use of different ULD variants.
With perfect knowledge of a ULD fleet’s location by
type, an airline can ensure that ULDs are utilised in
such a way to optimise sales opportunities and
maximise the use of these assets.
Reputation: An improved reputation can lead to
extra sales opportunities through the retention of
existing and attraction of new customers. “Delivery
to schedule” is a major performance measure for
many cargo operators.
Failure to deliver freight to schedule can in many
cases be attributed to the unavailability of ULDs. In
addition a ULD containing ‘valuable’ freight may be
located at a location but the airline does not know
exactly where it is, thus leading to a later than
promised delivery to the customer.
Tag Performance
The unique aspects of Sat-Tag are its specification
and performance. Two overriding factors govern this:
• Firstly the requirements of the regulatory
authorities.
• Secondly the demands of the industry.
The regulatory requirement to ensure the tag is
automatically shut down whilst on board the aircraft
is extremely challenging. A considerable amount of
development time has been spent before arriving at a
100% safe solution.
The tracker uses Frequency Reconciliation and
Control (FRAC) technology for which Sat-Tag has the
exclusive license for use in the aviation industry. It is
already deployed in the automotive industry (passing
the most stringent safety tests) providing keyless
access to open a car and prime the ignition. Sat-Tag
is confident that approvals from EASA, FAA and CAAC
will be forthcoming prior to launch.
FRAC enables the tag to know when it is about to be
loaded onto the aircraft. At this point it is put into
sleep mode, switching off the GPRS transceiver. It
remains in this state until it is off loaded when it will
re-commence normal operation.
Sat-Tag is in the forefront of establishing this new
control system which will be known as
SafeOnBoard.
Key performance characteristics
External report accuracy +- 10 metres
Internal airport report accuracy – location defined.
Viz: LHR Terminal 3
Coverage - 97% of world’s populated regions
Reports from pre-defined zones by accessing on-
board library of strategic locations
Zone alerts when entering restricted areas
Quad band GSM/GPRS with integrated GPS
TCP/IP protocol allowing data delivery via Internet
to singular or multiple locations
Optimised power consumption through the use of
intelligent locale mapsense
Location Identification
Making effective use of tracking is dependent on A specific area within the airport is identified and
positional information which is capable of being zoomed into.
analysed within the operating framework of each and
every airline.
A pre-requisite is the ability to formulate reports
giving operational information that will provide the
rationale to streamline and improve the entire ULD
fleet operation (as with dollys and catering trollies).
Sat-Tag uniquely has the capacity to store thousands
of Geofences on board. Geofences are specific areas
that are mapped with their coordinates. What this
means is when a tag enters a Geofence it can be
programmed to send a position report. If it isn’t
supposed to be in the particular area it can send an
alert message.
Each tag will have over 1,650 airport perimeters
stored – all use the three digit IATA code. In addition Each click with the mouse stores the GPS coordinates.
major structures such as airport terminal buildings When the boundary is completed, the geofence is
will also be included. So immediately the key saved with its name: Maintenance building 2 (FRA is
worldwide airport landmarks will be covered. already logged).
However every airline will also have specific areas
that are important and relevant to its business.
Sat-Tag through its portal covers this need by
enabling airlines to create their own geofences which
may be uniquely relevant only to their specific
operations.
Creating a specific geofence in Sat-Map couldn’t be
easier. If the area is within an airport it can be
created within an existing airport perimeter geofence.
The only requirement is the local knowledge to know
exactly where the area/building is. Then click the
mouse round the boundary and save the file. The
coordinates are loaded onto all tags in the fleet, the
end result is a position message that identifies the

Here the specific zone is shown within FRA complex.

fact that a ULD is for example in: FRA maintenance
building 2.
The FRA perimeter geofence is retrieved.
It is also possible to create geofences that are outside
airport complexes, such a freight forwarders, direct
customer offices. Providing the location is known or
identified accurately it can be stored on the tag and
will carry the chosen description when reporting its
position.
Sat-Man ensures effective Asset Management
The final link in the chain is without doubt the most
important. Cargo Management Computer
Programmes have to be able to integrate tracking
information seamlessly. Information from Sat-Tag is
delivered in a format that can be stored and
analysed by any modern software.
Within months, sufficient operational data is stored
to enable the really important reports to be
produced – the forecasts for future optimisation of
the fleet.
Asset tracking is a means to an end, the objective
being to substantially improve profitability and
performance.
Sat-Tag provides the answers to unrecorded losses by
showing where the problems exist. Information
shows not only where an asset is located but enables
entire procedures at every station to be assessed.
Performance comparisons across a network, down
time, turn round time, loading efficiency,
maintenance efficiency can be analysed
automatically across the fleet and by ULD type.
The following are a few examples of basic reports
that are available to cargo operations on an ongoing
basis.
Investment Decision
An airline with a fleet of approximately 10,000 ULDs Passenger Baggage: SITA in its 2010 Baggage Survey
for the transportation of passenger bags and freight estimates that just over 25 million bags -- roughly
would have a replacement cost of at least $8m. 1.1% of all checked bags -- were mishandled world-
wide in 2009. Airlines spent $100 on average for each
To track this entire fleet using Sat-Tag the airline will mishandled bag to track, ship and reimburse
need to fit a tracking device to each ULD and enter passengers. A total cost the World’s airlines of $2.5
into a contract for the supply of airtime. billion.
Based on an asset financing solution an all-in 5 year Mishandled bags have become a key focus for all
supply contract would be available for under $5 per major international airline hub operators. By tracking
month per device. the ULD containers an airline will inevitably reduce
The basic tag has a minimum economic life of 5 years the overall number of mishandled bags.
and will be delivered free of charge with an Tracking the entire ULD Fleet will certainly make an
installation pack, spare battery and battery re- improvement on baggage retention. For example if
charging system. The airtime supply will include the this airline improved its losses by just 10%, it would
provision of a basic reporting package and on-going see the following savings:
support.
Reduced Existing Future Saving
Airlines will be required to install the device upfront baggage 11.3 per 10.3 per
at an estimated internal cost of $50 per device and losses 1,000 pax 1,000 pax $2,140k per year
subsequently change the battery during routine repair
and maintenance. The problem of short shipped bags will not be
eliminated until each individual bag can be tracked
In summary the upfront cost of installing a 10,000 with its own device. The economics of Sat-Tag
ULD fleet would be $0.5m. tracking devices do not yet support the individual
Return on Investment tracking of customer bags but as the unit cost drops
in the future Sat-Tag is confident of being able to
An airline operating a fleet of 10,000 ULDs should see supply the travelling public with their own personal
a positive return on investment within 6 months of baggage tracking devices.
full implementation. This is based on the following
assumptions (all figures $’000s): Until that time it is however reasonable to assume
that by tracking entire ULD fleets ‘lost bags’ can be
Lease reduced and the adoption of Sat-Tag will contribute
charges
Sat-Tag Installation Year 1 Year 2-5 to the industry’s efforts to improve baggage retention
Global
Tracking (one off) costs costs and stem these losses.
message
plan
If these savings were included in the return on
10,000 ULDs $500k $600k $1,100k $2,400k investment calculations this airline would be seeing a
Savings minimum net improvement of over $13 million over
Tracking Savings &
Benefits
Existing Future &
Benefits the five year period.
Benefits

Less CapEx: Sat-Tag set for launch in 2011

- lower ULD
losses 2% 0.5% During 2010 Sat-Tag will continue to develop and
+$350k + $1,400k refine its launch product in parallel with the approval
-reduced 15% 0%
buffer stock process which it is undertaking with its airline
partners.
Improved 15% unrecorded for
fleet more than 48hrs +$960k + $3,840k The company is targeting a phased launch from mid
utilisation reduced to 5% 2011 and is confident that tracking these vital assets
Manpower will play a valuable part in aviation’s recovery over
50 staff 38 staff +$300k + $1,200k
Overhead the years to come as it invests in justifiable
Improved ULD management (sub-total technology to streamline operations not only
=$510k =$4,040k
above) improving the bottom line but also the industry’s
green credentials through ever improving use of
No calculations have been made for Airside efficiency, assets.
Interline procedures, Security, overall Fleet
Management efficiencies or improvements on baggage
retention.

SAT-TAG LIMITED THE SPRINGBOARD CENTRE LLANTARNAM PARK CWMBRAN TORFAEN NP44 3AW UNITED KINGDOM
T. +44 141 416 0340 E. ENQUIRIES@SAT-TAG.COM W. WWW.SAT-TAG.COM