Jan 11

Blog: Data Monetization Index for Aircraft Engine Manufacturers

January 11, 2022

Summary

Major aircraft engine manufacturers have a Data Monetization Index (DMI) between 32 to 55 percent. The DMI has been calculated for the aircraft engine subsidiaries of their respective parent companies. A higher DMI is generally preferable across companies and industries. By way of reference, internet companies have a higher DMI because most of their enterprise value is derived from data. For example, Google’s DMI is 93 percent as we will discuss in a separate blog.

Definitions
  • Data Monetization Index (DMI) = Data Valuation / Enterprise Value
  • Data Valuation = Aircraft Engine Data Valuation + Financial Data Valuation + Real Estate Data Valuation + Other Asset Valuation (this exercise uses Aircraft Engine Data Valuation exclusively)
  • Enterprise Value =  Equity Value + Long Term Debt - Cash, a key metric used in the investment community


Methodology

The YDC team recently published a DMI for key aircraft engine manufacturers. Here is an example for GE Aviation along with a benchmark for other aircraft engine manufacturers.

Because the aircraft engine subsidiaries are not publicly-traded, the Enterprise Value for these divisions  is an estimate based on segment financials and valuation comparables.  

The data valuation is based on aircraft engine data exclusively and relies on publicly-available data sources such as SEC filings and industry research from October 2021. In most cases, the value of aircraft engine data accrues from improvements in operating costs from data analytics. 

The total value of data will likely be higher once additional datasets relating to financials, real estate and employees are included in the coverage. Going forward, we will be working to make the data valuation more real-time.