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​Crude oil prices today remain subdued, continuing to recede for the second day following their sustained upward streak. WTI (West Texas Intermediate) crude forward prices opened at $50.78/b today, down by $0.95 (1.84%) from yesterday’s opening price of $51.73/b. Last week, crude oil reclaimed highs of $52-$53/b, but prices began to subside on Friday. Gasoline and diesel forward prices also opened with losses today. Crude and product prices are trading up and down today, awaiting guidance. Markets are mixed, with the U.S. government shutdown muddying the market outlook.

The U.S. federal government is in day 25 of shutdown, and U.S. President Donald Trump says he will not sign any measures for stopgap funding unless they include funds for his border wall. Historically, a short shutdown can have implications that are relatively minor. But a long shutdown gets exponentially worse, causing social, economic and environmental problems that grow increasingly severe. Delta Airlines, for example, reports that the shutdown will cost it $25 million this month, and that spotty security allowed a passenger to get through security with a gun. National parks are overflowing with garbage and human waste, and vandals have even killed some iconic Joshua trees in the Joshua Tree National Park.
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The overall picture is of a U.S. so badly led that global markets are looking elsewhere for positive signals today. China, for example, is responding quickly to a major slowdown in its imports and exports. The Chinese government pledged to keep monetary policy flexible and to improve access to financing for businesses. Economic advisors believe that Chinese tax cuts will stimulate GDP growth. Chinese company shares rose on the announcement, and also on hopes that the Chinese leadership will work harder to resolve trade disputes with the U.S. later this month. Markets also await news from the American Petroleum Institute on U.S. oil stockpiles, which are expected to show a drawdown from crude inventories and a build in product inventories.

Oil prices remain strong today, though the upward momentum has slowed. WTI (West Texas Intermediate) crude forward prices opened at $48.30/b today, an increase of $1.40 (2.99%) from Friday’s opening price of $46.90/b. Gasoline and diesel forward prices also opened higher today. All are working to hold their gains this morning. Market optimism is strong today, with renewed talks between the U.S. and China on the trade war. The first day of negotiation looks promising, with the surprise appearance of Chinese Vice Premier Liu He heading what was expected to be a lower-ranking delegation.

Global stock markets are shaken today by news that Apple cut its forecast of revenues, citing poor demand in China. This is seen as evidence that the U.S.-China trade war and slowing growth in China’s economy is having a larger-than-expected impact on Apple’s corporate profits. It is the first time in 15 years that Apple has cut its quarterly revenue forecast. Apple stock is a member of all three major Wall Street indices. This news is expected to diminish the recent recovery in equities and increase safe-haven investments. It may also stall today’s rally in oil prices. As of the time of this writing, the Dow Jones Industrial Average has just opened down by 320 points.

Pricing across the global energy markets will face headwinds in 2019, with a weaker and more uncertain macroeconomic framework deflating price formation in general, according to two special reports just issued by S&P Global Platts Analytics. Such headwinds will require the industry and portfolio managers to take a big-picture approach.
Particularly blustery head winds are in store for markets where prices finished 2018 at elevated levels, and well above costs, such as North American natural gas and global coal. However, if the supply side can adjust to the reality of slowing demand growth, energy prices can find support. For natural gas liquids (NGLs), the ongoing logistical constraints at the US Gulf Coast are likely to manifest on continued price volatility, particularly for ethane and liquid petroleum gas (LPG), over the next year despite strong global demand.

Access the full S&P Global Platts Analytics Top Factors to Look Out For in 2019 for Energy here.
Among the 22 key take-away themes:

• NGL supply growth will strain the North American energy system
• Saudi Arabia will need to be nimble to balance 2019 oil supply
• US oil supply limited by pipelines
• Oil demand slowing: trade war, industrial slump
• 2019 LNG supply additions largest since the Qatari mega-trains
• US gas supply growth to exceed demand growth even with LNG exports
• Shipping disruption looming – IMO 2020
• New Russian gas pipeline advantage over Ukraine
• US coal demand to decline again in 2019
• Growth in new refineries and complex capacity likely to weigh on refinery margins especially in Asia

Information gathered with help from Fuel Market Reports and S&P Global Platts Analytics

WTI closed higher today in spite of another large week of builds as market focused on the draw down in refined product stocks with refineries increasing output and imports falling for products. Oil complex was not in tandem with stocks today when it has been for some time, so that is an interesting move we will watch to see if pattern persists. Geopolitical fairly unchanged, economic news was mostly bullish, and weather seems to be leaning towards a colder than normal winter for much of the nation.

Refinery utilizations were up 0.4% at 89.2% this week. Imports were up for crude, but down for gasoline and distillates. Apparent demand for gasoline fell this week, while distillate demand rose.

Key Price Drivers
GEOPOLITICAL – Saudi Crown Prince has vowed to bring justice to Khashoggi’s killers after a phone call with Turkish President Erdogan. EU leaders say they are willing to extend the transition period for Brexit to allow for a smoother exit of the UK from the bloc. Communal clashes in Nigeria have forced officials to impose a 24-hour curfew hoping to gain control of the situation. Afghanistan parliamentary elections were extended one day (Sunday) to allow voters sufficient time to cast votes due to security threats and logistical issues. Other regions of the country will be voting later, but signs are promising that vast majority are willing to stand up for democracy.
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ECONOMIC – Fed remains committed to pulling back on stimulus and increasing interest rates slowly to prevent an overheated economy. Jobless rate remains around 3.7 percent which is considerably below what is considered full employment. Market still anticipates another rate increase in December with three more in 2019 and possibly two in 2020. Consumer sentiment supports a growing economy and major retail CEO’s are seeing that reflected in their business. New home sales have fallen in September blamed on higher interest rates and possible lower inventory particularly in Southeast due to hurricane impact.
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Visual Fuel Analysis: World Fuel and its suppliers can collect and analyze fuel samples from tank to determine water and particulate content prior to and after the cleaning process. Process will be considered complete when particulates are less than five microns.
 
• Fuel Polishing and Tank Sweeping: World Fuel and its suppliers will cycle fuel from each tank through our self-contained step-down filtration unit until the fuel meet ASTM 975 and ISO standards. This process is done utilizing a high-volume return of fuel to agitate the tank bottom debris and water to suspend and be filtered out of tank. Restoring a cleaner fuel and tank to meet standards.
 
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The much larger than anticipated draw in US crude stocks (although a large portion of this was on the West Coast) helped ease concerns of oversupply for now and allowed crude to close higher on the day. Week on week values still have WTI futures falling, however, the rest of the energy complex continues to rise. Unrest in the Middle East will continue to keep a floor on prices as the fear premium remains for now. Global economic growth and potential impacts from ongoing US trade disputes with a number of nations could become a factor for the energy sector. Tropical weather has not been a factor thus far this hurricane season, but it is still early yet not too late to enter hedges if you need to cover that potential risk.

​Key Price Drivers
 
GEOPOLITICAL –. Ceasefire was restored in Gaza on Friday following a violent exchange along the fence that separates Israel and Gaza that killed an Israeli soldier during protests. Yesterday, Israeli military shot down a Syrian fighter jet after it entered Israel’s airspace. Syria’s story differs and reports the jet was conducting an anti-terrorist operation. ISIS is claiming responsibility for deaths of 166 in Syria from targeted suicide bombings in Suwayada. ISIS is also taking responsibility for suicide bombing in Afghanistan that targeted the exiled Afghan vice president who was returning from Turkey. Another suicide bombing at a mosque in Nigeria occurred on Monday and Boko Haram is suspected.
 
ECONOMIC – US GDP report will be out on Friday. New home sales dropped to lowest level since October 2017. Treasury yields fell after home sales data was released. Market still following trade disputes with a number of nations and what those actions might have on the overall economy. Some attribute recent US growth to companies taking action ahead of tariff changes. Some analysts are seeing signs of a recession and want to see Fed focus on keeping inflation in check. President Trump’s pressure on Fed to review rate increase plans has met with mixed results in market. Some support his comments; others say Fed should stay the course.

As the “Industrial Internet” and The Internet of Things (IOT) go beyond the buzz-words of the board room, aerospace manufacturers and industrial leaders have started to implement some of the latest technology to make their manufacturing processes more efficient with reduced errors, deliver products to market more rapidly and finally leverage big data within their own organization. Augmented Reality (AR) and Virtual Reality (VR) are both mediums at which the industries are looking at to make work instructions easier and training more adaptive; these applications can provide “green” talent with contemporary tools and improve the production process. Augmented and Virtual Reality experiences have been created for the entertainment and gaming industries and for various marketing and brand awareness campaigns, nonetheless they still a way to go to influence the aerospace community.  

So, with early adoption and various use cases testing the productivity gains within the enterprise, how has Augmented Reality impacted the aerospace shop floor, and what technologies are necessary for its adoption to accelerate?

Industry giants like Lockheed Martin, Boeing and Applied Materials have invested in the development of both AR hardware and software solutions and have side projects and secretive labs dabbling with head-mounted wearables, light projections, telepresence or remote assist and SDKs to improve costs, time of task and error reductions on the shop-floor. The good news is that AR hardware and software are improving at a tremendous rate with the help of these use cases and investments. The capability of smart-glasses, smartphones and tablets are making astonishing strides in computational, graphical and sensory power with clearer, higher resolution displays and improvements to battery life enabling easier ways to consume and create AR and VR content. Some limiting factors that developers are dealing with is the amount of available memory and battery power on portable devices. Network latency also requires careful consideration when system architecture dictates whether this content should be stored on the device or a remote content server.

The future of Augmented Reality (AR) in the Enterprise however is a bit clearer today as the result of the recent DMDII/AREA Requirements Workshop in Chicago. At first glance, the two-day event promised to be a worthwhile exchange among parties with shared interests. On one side was the Digital Manufacturing and Design Innovation Institute (DMDII), which had invested considerable time and effort into creating a detailed set of requirements for enterprise AR with the assistance of American industry heavyweights Lockheed Martin, Procter & Gamble, and Caterpillar. On the other side was the AREA, the organization leading global efforts to drive adoption of AR in the enterprise. The AREA is to take over responsibility for the requirements document and its future.
But when the parties gathered in Chicago in the beginning of March, the event proved to be more significant than anyone could have expected. Here’s why:

• It demonstrated the burgeoning interest in enterprise AR throughout the developing ecosystem. The event attracted 90 attendees from 45 companies – all deeply committed to AR and eager to share their thoughts with one another.
• It provided an unprecedented opportunity for AR hardware and software providers to engage directly with enterprise AR users. With the detailed requirements to refer to, participants were able to engage with each other substantively and specifically.
• It signified the beginning of a global effort to make the process of implementing AR projects simpler and more orderly. With a set of requirements that will grow, become more defined and use case-specific over time under the aegis of the AREA, enterprises will have the power to define their AR solution needs clearly and confidently. Our goal at the AREA is to make the requirements accessible and usable to the wider AR ecosystem.
• It gives AR solutions providers a vital resource for developing their product development roadmaps. The direct feedback of the user community made it clear to hardware and software providers where they need to invest their R&D budgets in the near and medium term.
• It created the basis for a more open, vibrant, and participatory AR ecosystem. As the AREA makes the requirements a “living document” to which all organizations can contribute, they will become an increasingly useful resource to a wider range of organizations and will accelerate the adoption of successful AR projects in the enterprise.
• Many aerospace component manufacturers will soon be mandated to adopt XML and S1000D publishing standards for all of their various component or airframe maintenance manuals in order to not only comply with airframer requirements but to exploit the re-usability properties of the markup language for content re-use. Aircraft maintenance technicians must obtain new levels of job skill and knowledge to effectively work with modern computer-based avionics and advanced composite materials. Traditional methods of training, such as on-the-job training, may not have potential to fulfill the training requirements to meet the future needs of aviation maintenance. With a standardized, XML-based (or ARML 2.0), now aircraft maintenance technicians are getting even closer to an augmented training environment. An AR system coupled with the reusable properties of XML could enable job task training and job task guidance for the novice technician in a real world environment. It could reduce the cost of training and retraining of aircraft maintenance technicians by contemplating human information processing and assisting with performance of job tasks. Considering that these “live” industry standards and requirements for Augmented Reality content creation (software / hardware) have commenced in the space, enterprise now has a framework in which to govern these new tools, their usage and a way to work in parallel with their specific, industry compliance and regulatory structure. Organizations like AREA (Augmented Reality Enterprise Alliance) are working with industry leaders and executives to formalize and standardize the AR implementation process. Content creation, privacy, protection of intellectual property and industry applicability are all items at the top of the list for groups like AREA and their enterprise counterparts to consider when trying to create a baseline of governance to AR creation and usage.
• In order to deploy new technologies, all industry needs to build strong business cases to get upper management to approve budgets and prove that these new tools will provide a significant return on investment, improve the manufacturing process, and improve safety on the shop floor. Aerospace manufacturers need to keep their technicians on-task and keep them “ship-side”. As soon as the technician has to leave his or her work space to retrieve a part or refer to a colleague for advice or assistance, productivity is lost. AR tools can significantly reduce the time to complete tasks and can provide remote assistance that keep the technician in his or her workspace longer and promotes better efficiency. However, there are still parts of the puzzle like tracking and visualization that need some more development and only with properly initiated use cases will aerospace enterprise be able to reap the benefits of this emerging technology.
   
   
  

Today, leading organizations around the globe are making major commitments to the process of business transformation. The goal of the reshaping effort is to minimize risk, and achieve greater efficiency, profitability and agility – all vital ingredients for original equipment manufacturers (OEM) in a number of verticals.  Engineering Services Outsourcing (ESO) is an end-to-end solution and a strong business case can be built to an outsourcing partner with the expertise, experience, technology and customer focus to deliver benchmark capabilities based on industry’s best practices. Major aspects have channelized a new trend in ESO; the sheer diversity of engineering services, the outlook that most outsourcing will turn toward an engineering Knowledge Process Outsourcing (KPO) offering and the pressing need for cost control in yet to be stabilized global markets that are still running on budget austerity efforts.

Many of the largest OEMs in North America and Western Europe have considered ESO as an extension of their engineering organization. According to data collected in 2014, India-based providers have accounted for nearly a quarter of the overall engineering services market, which is worth approximately $80 billion a year. The Indian ESO industry has been made up of Global Engineering Centers (GECs) and engineering services providers (ESPs). Half of the top research and development (R&D) spenders operate in India through these GECs.

Recent advances in sensor technology, wireless communications, distributed computing and big-data capabilities are enabling the Internet of Things (IoT) to rapidly transform the technology landscape. IT and embedded electronics are permeating the product and service engineering process, and consumers’ expectations and requirements are increasing just as rapidly. Organizations in all industries must now deal with a profusion of data and devices. This new challenge is creating unique opportunities for ESO providers to create intelligent engineering applications to customize and monitor the entire product experience; ideas like the connected car, real-time and continuous healthcare and remote monitoring of smart homes.

Engineering and designers are creating products that capture their own usage data and establish a continuous feedback loop. This way they can make their products more intelligent, and OEMs can increasingly deliver their products as-a-service and use software applications to define the customer experience and product evolution. Companies typically outsource their engineering and design when they have sporadic engineering needs, need to load balance the work and may have trouble getting to those important projects. Manufacturers reasons to outsource are: (1) They can’t justify having their own engineering team for every design project, (2) they have an internal team with capability and capacity but need to manage spiking demand or they require specialized expertise.

ESO will be characterized by the “integration of manufacturing” as a required field of expertise. As the industrial internet becomes more secure, industrial automation, robotics and 3D printing will enable a new dynamic and a new knowledge and talent base. As an example with GE Aviation and Honeywell, the resource landscape is changing. Half of their workforce consists of Chemical / Electronic / Mechanical engineers, the other half are software engineers. This integration requires a newly defined skill set and expertise consistent to with the digital approach to manufacturing.   
A wave of engineering services should present itself in two phases in the coming years:

1. The evolution of the “digital-shop floor” will integrate previously siloed information across an enterprise with systems like Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM), and Manufacturing Execution Systems (MES) resulting in increased productivity, optimized operational costs, enhance asset uptime utility and improved safety.
   
   
2. The design-to-print concepts of additive and 3D manufacturing will impact product maintenance and repair requirements. Imagine a washing machine or a predictive maintenance system that provides 24/7 monitoring of the production of expensive infrastructure equipment that can trigger the printing of a spare part at a local provider in a fraction of the time and cost.
   

To realize the full potential of these growth opportunities over the next five years, the ESO delivery model must change. GECs that are entirely focused on engineering products must address the challenges of IT-enabled engineering by broadening their scope and enhancing their investments in new processes and technology. They must also leverage the higher level of experience, exposure and investments of ESO providers in a collaborative model.

Managed, Shared or BPO Services contracts will move away from the traditional engagement models to demand more value and tighter service integration including pricing aligned with client business metrics, stringent service-level agreements and key performance indicators. This way the business model will shift toward greater sharing of risk and reward between the customer and the service provider.

There seems to be a universal agreement in recent years that the worldwide eLearning market will show fast growth in the coming years. The worldwide market for Self-Paced eLearning practices reached $35.6 billion at the end of 2011 and the annual worldwide growth rate was nearly 7.9 % (Ambient Insights 2016) since then. Self-Paced eLearning is education in which learners study at their own pace with no fixed starting date in common with other students enrolled in the program. However, there’s certainly a fixed overall completion timeframe. Therefore, employees whether in front office or on the shop floor, not only do they have the devices to consume training in real time, but it’s accessed at the time of need.  With the proliferation of easy-to-use, easy-to-publish content authoring and learning platforms linked with a number of mobile applications and the fact that everyone has a device (BYOD - Bring Your Own Device) the learner can be engaged quickly and efficiently. With these various tools and a properly deployed eLearning strategy, an organization can:

• Personalize the learning experience – your employees are better able to learn when they have resources that are tailored to their specific needs
• Efficiently author content – your instructional designers and subject-matter experts (SMEs) need to be able to share their knowledge effortlessly and easily
• Be more agile – at the very least your learning content needs to change as the business does, assisting your employee prepare for those new challenges or new skills
• Drive performance – learning content is the fuel for individual performance gains, and thus can lead to a high-performing organization

The aircraft MRO industry is going mobile – or at least, taking steps to implementing tablets and smartphones for maintenance and training application. Most of the mobile usage in commercial aerospace has been centered in the cockpit. However, many MRO (Maintenance and Repair Organizations) managers are taking steps to adding handheld tablets or phones to an aircraft technician’s toolbox. “Selecting the right device depends specific use-cases and user context.” (Sven Heitsch, Head of Strategy and Technology Information Management at Lufthansa Technik, Aviation Week, Sept 2014). The decision to link mobile devices to back office learning management systems or enterprise resource planning software is also on the rise, but organizations are still cautious due to cultural and integrational challenges. Many conditions apply when deploying new mobile enterprise tools. When developing use cases on the shop or manufacturing floor, the device’s screen size and readability could be a consideration; using these devices to view complex, work instructions or learning content may be impractical in certain locations or environments. Nonetheless, as these tools are evaluated, they have shown to accelerate the learning process and increase productivity across the board.
 
No industry is immune to the impact of mobile devices and almost any business can take advantages of their capabilities. Obviously, industries where employees are naturally mobile are more affected by the rise of smartphones and tablets. In particular, we see mobile devices impacting the MRO shop floor keeping aircraft technicians “ship-side” and reducing errors and increasing productivity.  Cloud computing and SaaS applications are increasingly important in these business applications and these devices are considered mission-critical technology in most aerospace use-cases.
Types of E-Learning
There are many types of eLearning tools and are synonymous with web-based training, distance learning and online training, and just about everyone is familiar with these terms. This type of training allows flexibility, access to colleagues and SMEs and an emphasis on learner-centered content. Here are a few commonly used tools:
 

• Cloud-based, Learning Management Systems – access to training resources at a learner’s moment of need, cost reduction of physical training materials and on-site instructors as well as increased employee engagement are just some of the various advantages to a cloud-based, learning management system that can be accessed by a personal device. Authors can effortlessly create skilled-based learning programs and track how they impact the business results.

 

• Big Data in eLearning – There are a variety of benefits that Big Data offer to eLearning implementation, all of which have the power to revolutionize the way we analyze and assess the learning experience. It allows organizations to understand how their learners are digesting information, pinpoint areas to fine tune courses and modules, how social learning is shared, and the power to predict the areas specific learners are struggling or excelling. An organization’s data has left a bread crumb trail and these analytics can help an author deliver better content with more precision and effectiveness.

 

• Responsive Learning Management – Current learning practices are driven by the individuals that use a learning management system, not the actual system itself. An LMS must adapt to a world where mobile devices are the learning tool of choice. As more and more learning courses are utilize  social media, MOOCs (Massive Open Online Courses) and informal learning, an LMS is only as good as the content it helps to deliver and the data that it can provide. So, for users to engage an LMS must fit into the contemporary way they learn and develop skills.

 

• Wearable Tech Transition – In order to train a new workforce, or a millennial employee, you have to introduce tools that are current with their level of technological savvy and experience. Growing up with many technologically-advanced mobile devices and appliances, this future workforce may not be able to depend on the tribal knowledge that came before them.  Not dissimilar to video gaming, wearable tech, virtual and augmented reality tools are developing at a rapid pace. They are currently being utilized on the shop floor at companies like Lockheed Martin, Lufthansa, and Boeing. They are making complex work very simple. The advancement of Smart Glasses and the proliferation of open-source software in Augmented Reality will close the gap between a millennial and a more, seasoned and aging workforce

 

• Automated Course Authoring – Curriculum is becoming more interactive and, at the same time, an increasing number of learners are using mobile devices to access learning courses. Therefore, the way that eLearning is being designed, created and delivered is rapidly changing as well. HTML5 authoring tools are becoming more easy to use and even unskilled authors can publish great content to any device on any platform, in real time. So, you can publish once for a number of BYOD devices with ease.

 

• < > – with the application of game-design elements and game principles in learning today, Gamification improves user engagement, organizational productivity, and makes learning fun. Gamification takes the data-driven techniques that game designers use to engage a younger workforce by employing high-interaction and motivational techniques to increase a learner’s knowledge.< > – Learning on the go. Different learners respond differently to digital learning, based upon how they prefer to learn and the content that is being presented. Therefore, developers should be keenly aware of their audience and learning materials should be designed for specific mediums. Mobile has evolved so much over the years, and it’s no surprise that in 2013, mobile devices became the most commonly-used, web access tool, surpassing the PC for first time (Gartner, 2014). Mobile phones are always “on” and the user can access learning courses 24/7.

As the “Industrial Internet” and The Internet of Things (IOT) go beyond the buzz-words of the board room and technologies start being deployed within industry, aerospace manufacturers and industrial leaders have started to implement some of the latest technology to make their manufacturing processes more efficient, reduce errors on the shop floor, deliver products to market more rapidly and to finally leverage that big data within their own organization. Augmented Reality (AR) and Virtual Reality (VR) are both mediums at which the industries are looking at to make work instructions easier and training more adaptive, provide green talent with contemporary tools and improve the production process. Augmented and Virtual Reality experiences have been created for the entertainment and gaming industries and for various marketing and brand awareness campaigns, however both have still a way to go to influence the mass market. So, with early adoption and various use cases testing the productivity gains of industry, how has Augmented Reality impacted the aerospace shop floor and what technologies are necessary for its adoption to accelerate?

Industry giants like Lockheed Martin, Boeing and Applied Materials have invested in the development of both AR hardware and software solutions and have side projects and secretive labs dabbling with head-mounted wearables, light projections, telepresence or remote assist and SDKs to improve costs, time of task and error reductions on the shop-floor. The good news is that AR hardware and software are improving at a tremendous rate with the help of these use cases and investments. The capability of smart-glasses, smartphones and tablets are making astonishing strides in computational, graphical and sensory power with clearer, higher resolution displays and improvements to battery life enabling easier ways to consume and create AR and VR content. Some limiting factors that developers are dealing with is the amount of available memory on portable devices to store digital objects and content. Network latency also requires careful consideration when system architecture dictates whether this content should be stored on the device or a remote content server.

Aerospace manufacturers have adopted many form factors of AR on the factory floor. One of the first aerospace applications of augmented reality is the Heads-Up Display (HUD) used by fighter pilots; it provided a digital overlay on an artificial horizon with a variety of useful information like airspeed, engine gauges and power usage. Augmented Reality allows the user to see the real-world with virtual objects superimposed upon or composited with the real world. Today’s mobile devices have all the necessary components to enable location-based augmented reality packed into one device: a camera, a screen, GPS capabilities, accelerometers, gyroscopic sensors and even a compass.  However, let’s take a look at all the form factors in play throughout the aerospace community.

What are aerospace’s commercial intentions with Augmented Reality?
As mentioned earlier, some of the technical trends of IoT, the expanding video game market, as well as a variety of support technologies will improve and enhance AR systems and the overall experience. IoT will have a wide-ranging influence in the areas of information analysis, automation and control for all aerospace companies. It will be useful for information and analysis functions that:

1. Track Behavior & Productivity
2. Create Enhanced Situational Awareness
3. Provide Sensor Driven Information

And, IoT will allow for automation and control by allowing:

1. Process Optimization
2. Complete Component Health Monitoring
3. Proven Manufacturing Efficiencies

From these lists, Augmented Reality has, and will continue to play the largest role in further enabling situational awareness and productivity within the aerospace enterprise. Data from large number of sensors, deployed in heightened awareness of real-life events, particularly when the sensors are coupled with AR display technologies. As the Internet of Things and AR continue to develop, it’s becoming more probable that AR will become one of the predominant interfaces for IoT in much the same way that the graphical user interface (GUI) became the interface for the Internet.
 
Aerospace Use Cases
There are many use cases for Augmented Reality in the aerospace industry as it has had a long history with the technology:
 
Company: Boeing
Form Factor: iPad AR
 
In 2008, Paul Davies, a research and development engineer at Boeing began working with Boeing Technical Fellow, Anthony Majoros. Up until today, they’ve used commercially-available technologies such as Total immersion’s D’Fusion platform to demonstrate how technicians repairing and building wing assemblies could perform complex tasks with AR running on tablets. The AR group was 30% faster and 90% more accurate on their first try. By, their second try, errors had been reduced to virtually zero. Technicians who had never been on the wing before had become experts. Davies, as a result of his findings, explained that there are building blocks of AR, two of which still need some work:

• Tracking – understanding the 3D pose of a camera as well as the position of real objects in 3D space with a high degree of accuracy
• Core Function – a software component that ties in information and functions like CAS models, calibration data, user interface and rendering
• Visualization – How you present that augmented view to the user

Tracking and visualization are the two blocks that Davies feels haven’t been solved. For visualization, the issue is often that you have to hold something and that the ergonomics of making AR devices wearable and safe within the dangerous environments where we want to use them. As for Tracking, the issue is using external infrared systems to help locate AR devices in space. IMUs have drift issues, ultrasonic, and magnetic resonance, so which every technology you choose will require some kind of sensing infrastructure to be installed.
(Also in Nov 2014, APX Labs announced that its Skylight software platform for smart glasses had been selected by Boeing to evaluate wearable technologies to improve manufacturing efficiencies in manual assembly tasks.)
 
Company: Lockheed Martin
Form Factors: Smart Glasses (Epson Moverio)
Software: NGRAIN
 
Until recently, Lockheed Martin needed a team of technicians with years of training to wrench on sophisticated aircraft like the F-35. Now, on the advanced factory floor, engineers are using augmented reality glasses and educational software that provides real-time visuals during an aircraft’s complex assembly.  Lockheed Martin is collaborating with NGRAIN on a trail in which employees are wearing the $700 EPSON Moverio BT-transparent glasses with front-facing cameras using motion and depth sensors to assist while installing brake components for example. Divisions within Airbus have also been experimenting with AR for over a decade. They were studying how Augmented Reality could assist with assembly and service tasks but judged too immature to implement into production environments for reasons like:

1. Difficult Tracking Conditions Inside an Aircraft
2. Unsolved Cabling Issues
3. Maturity of Head-Mounted Displays
4. Different types of AR hardware usage (HMD, Mobile Devices, Projection)
5. Expensive Hardware, Software and Support

The AR glasses are still in trial mode on the Lockheed factory floor. Getting this technology onto military bases, where Lockheed technicians handle repairs to keep the planes battle-ready, will be slightly more difficult. The military doesn't allow cameras on those bases, so the front-facing optical sensor is currently verboten. However, the current project proved that their engineers could work 30% faster and with up to 96% accuracy. Those numbers are huge for a company like Lockheed Martin. If even one F-35 fighter jet needs additional repairs and can’t be sold or deployed, that costs the manufacturer big piles of money.
 
 
Company: Lufthansa Technik
Form Factors: Mobile Projection
 
Lufthansa Technik has now introduced a laser-based AR system for supporting installation in the VIP & Special Mission Aircraft Services business unit as part of the “Projection-Based Installation Support” project. The mobile projection system can be positioned and aligned flexibly in the aircraft fuselage in line with the respective installation situation. The installation template is projected onto the work environment for the relevant structural employee in line with the employee’s current job card. This template corresponds to the component contours selected in the virtual 3D model, which are projected onto the structure in the correct position and therefore act as a positioning and alignment aid for the component that is being installed. With no interruptions or other interactions, the employee can install the component with high precision and significantly more efficiently than using conventional alignment tools.
The technical implementation of the laser projection system was demonstrated in the first completed project phase both on a mock-up of the training workshop and in practice on three complete layovers – a result of the excellent inter-disciplinary cooperation between engineering, dock and IT. Not only was the precision significantly increased when installing primary structural connections (T-Rails), but the level of work required was reduced by almost 50 percent. Lufthansa Technik is currently testing additional applications of projection-based Augmented Reality, for example in the form of foiling and painting templates. The use of future digital assistance systems for other departments is also being examined at present for use in a larger-scale innovation project. The preparations for the project are already underway. 

General Aviation and Commercial Aircraft - Illegal Usage
By Gates L. Scott, PilotMag 2008

In 2005, it was estimated that the global trade of illegal drugs topped over $400 billion dollars. Some say this totals the amount spent on food in the same period of time. Drug trafficking is the most widespread and lucrative organized crime operation in the United States. Illegal drug sales make up for over 40% of the organized crime activity in the country and in 2006, the estimated street value of cocaine seized by the United States Coast Guard was estimated at $3.1 billion dollars; over 238,000 pounds of cocaine. America’s hunger for cocaine and other illegal drugs drives the demand. Over 75% of cocaine distributed primarily from South American countries like Colombia, Brazil, and Venezuela ends up on the streets of the United States. However, the South American domination in cultivation, processing and distribution has been lessened by drug interdiction programs of the Drug Enforcement Agency, the National Guard, the United States Coast Guard, Civil Air Patrol and South American government’s imposition of severe restrictions on the importation of chemicals essential to cocaine processing and by the destruction of various facilities and processing sites throughout the region, as well as intensified law enforcement measures have made a great impact on trafficking operations. However,  organized crime groups involved in drug trafficking share a “core/support” configuration found to be common to all organized crime groups and considering the demand and profits, it still is one of our country’s biggest problems. General and business aviation play a significant role in both the transportation of illegal drugs as well a aircraft ownership, acquisition and registration. The Federal Aviation Administration works in unison with many different services to combat illegal activities that include aviation, however the problem may be solved at a more local level with the general and business aviation communities insisting and participating on watch-dog programs. Drug smuggling aircraft and pilots walk through local, fixed-based operators everyday. The community should pay more attention.

It is estimated that Colombian trafficking organization currently export over 65% of processed cocaine on private aircraft. The remaining percentage is shipped on ocean vessels or smuggled through commercial airline carriers. Cocaine is ordinarily smuggled from South America to the United States for various organizations or groups by American citizens acting as mercenary pilots. Pilots that assist in transportation are normally ex-military, commercial and private pilots, and in some cases unlicensed pilots. The speed and mobility of air transport have made it a quite efficient and evasive mode of shipment among drug smugglers. Many groups have built clandestine airstrips either near their processing centers or along coastlines to permit fast, direct export. It is said that there are over 150 clandestine airstrips and three international airports on Colombia’s north coast to facilitate smuggling activities. Also, transshipments locations that include the Dominican Republic, Cuba, the Bahamas have been used with increased regularity for shipment drops and repackaging.

Individual pilots that are contracted or recruited for this type of smuggling are generally responsible for purchasing and or leasing transportation vehicles and flight crews. Due to the accessibility to aircraft for sale through such publication as Trade-a-Plane and Controller, pilots are able to find a host of different aircraft for the job. Also, pilots are able to acquire aircraft through many government auctions of seized property that allow traffickers options to repurchase aircraft that they were previously forced to forfeit. As traffickers attempt to move as much product as possible to the widest range of destination in the United States, aircraft that is selected for smuggling generally represent the ultimate balance between cargo capacity, useful load and range. The most popular drug smuggling aircraft to reach this balance are your conventional light-twin engine airplanes, such as the Piper Aztec, Piper Navajo, and Cessna 400 series. Helicopters have always been a useful aircraft for smugglers offering confined areas and remote locations for various off-loading operations.

In June of 2006, United States and Canadian authorities had arrested more than 40 people, seized roughly 4 tons of marijuana, 805 pounds of cocaine, 3 aircraft and $1.5 million in cash over a two year investigation as smugglers exploited terrain at the border within national forest or public land boundaries to make air drops after lots of pressure was put at points of entry. Peter Ostrovsky, Immigrations and Custom Enforcement Special Agent said using these air drops, referring to footage of a Bell Jet Ranger helicopter swooping in before dawn to a remote opening in the Okanogan National Forest and releasing drugs to a waiting pick up truck, are a “new frontier” in the war on drugs.

With the introduction of turbine prop aircraft that boast longer range and fuel efficiencies, the category is also becoming more popular for long, ferrying flights. Most of these aircraft can transport at least of ton of cocaine a range of over 1,800 miles and stay airborne for many hours. Larger aircraft as the DC-3 and even aircraft like the Grumman Albatross are very common on shuttle flights to and from transshipment points, however speed and efficiency are necessity in the trade. Therefore, Lear jets and other business type aircraft are becoming the mode of choice, today.

In order to maximize range and capability, planes are often outfitted with auxiliary fuel systems and additional tanks. Fuel systems that are attached to the outside body of the aircraft or the wing must be inspected by the FAA each time the outfitted aircraft prepared for flight. However, in smaller aircraft that require additional fuel requirements, the practice is to install a collapsible rubber fuel cell or “bladder” which is placed in the plane’s fuselage. Once the fuel is used it is simply thrown away. The space occupied by the fuel bladder on a trip to South America makes room for cocaine transport on the return journey. Bladders are under all circumstances, prohibited by Federal Law.

Antiquated, yet affective, specialized electronic equipment is being used in drug smuggling aircraft to monitor law enforcement surveillance efforts as well secure communications within their organizations. Most devices are readily available in the United States and despite their expense trafficking organization will fund the cost of any equipment that facilitates ease in their operation. Devices that are used commonly are state of the art radio equipment, communication scramblers, cell phones and encrypting devices used to prevent law enforcement interception. The radio scrambler will attach to  an aircraft avionics system and scramble the radio frequency with a variety of  different codes. Only someone with a receiver coded to the particular scrambler frequency can decipher the transmitted message and the message is intelligible to other receivers. The speed with which a digital message is transmitted precludes radio tracking at least by traditional triangulation. So, traffickers can send and receive coded messages without being detected. Avoiding law enforcement is also reliant on specialized devices that include radar altimeters, beacon-interrogating digital radio, position tracking equipment and long range navigation instruments. Strap on night vision goggles can intensify available light by a factor of 50,000 and greatly increase the smugglers vision at night, traveling without beacons or strobes. Various agencies in drug interdiction efforts have very sophisticated systems that include Forward Looking Infrared systems, synthetic aperture radar and real-time video downlinks available for surveillance that is making these transport flight more and more difficult for pilots to fly undetected. Nonetheless, despite these agencies efforts, advancements are made on both sides of the equation that thwart capture and interdiction. With a large amount of the nation’s budget continuing to fund the Global War on Terror, money for upgraded systems, aircraft and other needs to fight the war on drugs has continually diminished. 

The effort to thwart drug trafficking is becoming a sophisticated and costly proposition. General aviation and commercial aviation are playing extremely large roles in the problem. As demand remains high in the United States for illegal drugs, a problem exists not only among the aviation community but amongst international governments across the globe. There are hundreds of pilots that participate and perpetuate the problem and coerced to lauder money, fly drug smuggling missions, and diminish the efforts of internation agencies to stem the flow of drugs.

On April 1, 2008, CNN reported a story of a senior Vietnam pilot Quoc Viet Lai, accused by the Australian Crime Commission of taking bribes to smuggle almost $ 4 million of drug money out of the country in previous trips dating back to 2005. Using his privileged airline pilot status to bypass customs, he would pick up suitcases of cash in Melbourne and Sydney and carry them onto planes back to Vietnam. Quoc Viet Lai appeared in court on April 1st and was charged with 40 counts of money laundering. Lai is the second international pilot from Vietnam’s government-owned carrier to be arrested by the commission.

As part of a large investigation by a collection of theorists and journalists, a report on April 11, 2008 by Narco News, substantiated by records obtained from the Federal Aviation Administration, offered significant evidence to the connection of two or more planes carrying shipments of cocaine lead directly back the United States government. A Gulfstream II jet recently crashed in the Yucatan Peninsula carrying over 4 tons of cocaine on September 24th of last year, the owners of which were Clyde O’Conner and Greg Smith, both from Florida. Recent ownership changes just two weeks prior to the ill-fated flight have opened up a Pandora’s Box of suspicion. The Gulfstream II (tail number N987SA) has been presumably linked to rendition flights by the CIA according to investigation conducted by the Parliamentary Assembly of the Council of Europe and other related testimonies of government operatives. In a pleading filed as part of a wrongful termination case brought before the United States Merit Systems Protection Board in 2004, Baruch Vega, a CIA asset and a foreign, counterintelligence informant, filed a lawsuit September of last year in the United States Court of Federal Claims in Washington, D.C. claiming the American government owes him back pay for his work that helped capture 114 Colombian drug smuggling targets. In his pleadings, he claims that between 1997 and 2000 Greg Smith listed on the bill of sale with O’Connor for the Gulfstream II was brought in by the FBI to pilot some 25 to 30 flights between Florida and Latin America as part of a United States sanctioned operation targeting Colombian narco-trafficking. Vega was a major asset for the DEA, the CIA and the FBI.

In what some say to be a connected incident, on April of 2006, a DC-9 (N900SA) aircraft flying out of St Petersburg International Airport bound for Venezuala and registered to a Skyway Aircraft partner Frederic Geffon’s Royal Sons Inc, a company also based in St. Petersburg was caught in Mexico carrying 5.5 tons of cocaine. These two aircraft are now part of an ongoing investigation in a magnanimous aviation deal which sold 50 American-registered aircraft to the Sinaloa Cartel. According to an indictment released over the holidays by Mexico’s Attorney General, Pedro Alfonso Alatorre, already indicted as the cartel’s chief financier, purchased the DC-9 airliner, the Gulfstream II business jet and 48 other planes not yet identified for the Sinaloa Cartel with laundered money, using a company that he controls that own currency exchanges at major airports in Mexico. Two American-registered planes with clear ties to the U.S. Government busted 18 months apart carrying multi tons of cocaine, both flying from St. Petersburg Airport; now that is something to think about.

On February 5, 2008, Howard Altman of the Tampa Tribune reported a story about a twin-propeller Cessna Conquest II also sold by the St. Petersburg company, Skyways Aircraft in August 2006 is now part of an international investigation, confirmed by the Tampa Tribune’s review of FBI and FAA records. As part of a “complex international money laudering scheme” to buy aircraft for drug smuggling, the aircraft was used for cocaine transportation from Venezuala to Africa, according to an affidavit by FBI agent Micheal Hoenigman. Larry Peters, the current owner of Skyways Aircraft, an aircraft broker, instructed his lawyer, Hunter Chamberlin, to take calls from the Tribune and said, “He (Larry) doesn’t know anything” about the airplane being used for drug smuggling. “This is a guy who has a small company, Whatever happens to these airplanes after Mr. Peters sells them, they enter the stream of commerce and the last Larry Peters will see of the airplane.” It turns out that Larry Peters also had connections to the former owner of the Gulfstream II that crashed in the Yucatan Peninsula, Joao Malago. Malago is a business partner of Peters in Atlantic Alcohol, a St. Petersburg company that imports ethanol from Brazil. Both deny any connection to drug smuggling.

In August of 2000, Panamanian officials working on behalf of the United States Customs seized a $1.5 million Bell Helicopter. Several years earlier the Panamanian government seized over $335,000 cash from a Bell Helicopter bank account in the United States. Alleged connection to the Black Market Peso Exchange, government officials said that highly unusual business transactions were taking place involving the sale of a Bell Helicopter. U.S. Custom agents working undercover became aware of the helicopter as they posed as money brokers working on a 2-year probe of a drug-money, laundering ring in Mobile, Alabama. The undercover agents would deposit cash into fictitious bank accounts and await instructions from their Colombian contacts on where to send the money. Oddly enough, the agents received instruction to make five wire transfers totaling $335,000 into the same Bell Helicopter bank account according to the seizure affidavit. The money was a partial payment for the helicopter. As the investigation continued, in 1998 a representative for  well-known, emerald mine owner, Victor Carranza, who coincidently has been linked to the drug trade and the right wing parliamentary groups in Colombia, had approached  a Bell Helicopter sales agent in Colombia to discuss an acquisition. To raise even more suspicion, this un-named representative, investigators learned had been indicted in the United States for drug trafficking in 1990. The Panamanian company used to purchase the helicopter was a front for Carranza and had been also previously linked to drug smuggling. Bell Helicopter quickly responded that it had no knowledge that the money used to purchase the helicopter was drug money. Between June and September 1998, Bell received 26 payments totaling $1,029,000 which were also credited towards the purchase of the defendants helicopter. All of these payments came from US individuals and companies not connected to Carranza or his company. This is a very unusual way to pay the bill. The United States government used the additional evidence to seize the helicopter in August of 2000 saying that the entire sale was paid for using the black peso system. It is also strange to add that the same time Bell Helicopter was negogiating the sale with Carranza and his representative, the company was lobbying Congress to earn a contract for Plan Colombia, a $1.3 billion aid package that the United States government just approved to help Colombia fight narcotics trafficking. The deal included 42 refurbished Huey II s for a price of over $130 million.

Least we not forget the careers of Berrimen Adler Seal or Jack Devoe. Both accomplished aviators in their own right, but caught up in the trade. Barry Seal, who enlisted in the Civil Air Patrol as a kid, the very organization that today flies reconnaissance and spotting missions for drug interdiction efforts, became the youngest 747 captain working for Howard Hughes at TWA Airlines and was recruited as a drug trafficking pilot by a personal friend who worked for the Ochoa drug smuggling organization. After he was caught in 1972 smuggling plastic explosives into Cuba in a DC-3, he lost his job at TWA and became one of the most notorious drug smugglers in the United States.  Initially, Seal flew a number of planes out of Louisiana direct to South America, one of which a vintage Vietnam C-123 military transport (incidentally, listed for sale in a local, general aviation periodical) capable of holding multiple tons of packaged cocaine. Colombian officials would receive brides to open Colombian airspace of $25,000 per flight for a “window” to conduct Seal’s smuggling flights . He maintained many aircraft cementing his Deep South smuggling operation. He had identical Cheiftan Navajos with Panther conversions, two Piper Senecas, and two of the C-123 twin engine military transports, at that time restricted aircraft as they were deemed weapons of war. The business was run like a covert operation as Seal gained respect and relations with the Colombian cartels. “The narcotics cartels I associated with was as professional as any Fortune 500 company” , Seal said in a President’s commission, revealing some of his tricks. Putatively, Seal became a snitch for the DEA and offered to break the Medellin cartel due to the fact that every major cartel was talking and working with Seal. After many hair raising flights and crashes into remote jungles, it is estimated that Seal brought in over $3 billion to $5 billion worth of drugs into the United States. He was embraced by then Vice President George Bush, former CIA Director, as an undercover operative after many convictions and indictments that should have sealed his fate. Seal wouldn’t stop there. With the United States government in his back pocket, he decided to use his undercover drug interdiction work to cover arms smuggling for the Contra operation in Central and South America in violation of United States foreign policy and in return was allowed to smuggle what he wanted back in his then home base of Mena, Arkansas. His planes were in plain view at the Mena Airport for all aviators and airport officials to see with some kept under strict security. His wild dealing caught up with him however when he was gunned down in his white Cadillac in downtown Baton Rouge by five Colombian gunmen after his illegal dealings finally caught up with him.

Jack Devoe, the owner of Devoe Airlines based in Miami operating a commuter airline to smaller cities in Florida in the 80’s and yet another renegade in aviation, drug smuggling. The business was a front for a Colombian drug trafficking operation. Devoe employed 8 to 10 commercial pilots and was involved in over 100 trafficking flights, carrying over 7,000 pounds of cocaine from South America to the United States in just under a five year period. There typical mode of transport was mid-size turbo prop aircraft. Their routes to South America would take them through the Windward Passage to official Colombian airports. In at least one instance, cocaine was openly loaded onto smuggling aircraft at Riohacha airport. In the early 1980’s Devoe shifted landings to clandestine airstrips maintained by the cartels themselves. Their routes back to the States extended over Venezuela/Colombian border, over Haiti and to the Bahamian base on Little Derby Island. There, cocaine was sealed into wing fuel tanks of a smaller aircraft and flown directly to the Florida coast. Devoe sent “cover-flight” aircraft ahead of smuggling aircraft to monitor DEA and Custom Service patrols by radio. These planes of course didn’t carry any drugs and were a great decoy pursuit airplanes. Once in the United States, Devoe’s strategy for clearing customs would be to “…act normally and file a flight plan, come in and land, and let them inspect the airplane…Custom inspectors were far less interested in a lengthly examination of my plane if I came in on a Sunday afternoon in the middle of televised football game. If the Dolphins were playing, that was even better.”