In-Flight Entertainment and Connectivity: Who Picks up the Tab?

In-Flight Connectivity (IFC) has become one of the fastest growing markets for satellite, and the competitive fervor is heating up as more avionics companies throw their hats in the ring. Moderated by Sima Fishman, managing director of Euroconsult, a group of industry experts described how they plan to position themselves in this market, as well as their predictions for its growth trajectory in the coming years at the “In-Flight Connectivity Focus: Service Providers and Airlines - Who Picks up the Tab?” panel at SATELLITE 2017.

According to Fishman, connectivity in commercial aviation currently stands at the beginning of a long growth cycle. Drivers for this market aren’t limited to passenger entertainment — weather information and tracking services for the cockpit crew, as well as analysis of aircraft data such as health monitoring and predictive maintenance will all have a role in this space.

So for David Bruner, vice president of global communications services at Panasonic Avionics, the first step to achieving some of these capabilities is reaching uniform coverage across the world. “We need to get ubiquity in the marketplace with every aircraft flying with these capabilities,” he said. At the base of it all, airlines already know what they want from providers: “a high speed, low cost and reliable network for [their] aircraft wherever it flies in the world,” Bruner said.

To reach the company’s goal of 100 percent global coverage, Panasonic Avionics has been feverishly buying up capacity on High Throughput Satellites (HTS). Bruner also hopes to layer capacity in heavily trafficked regions, which is what he calls “extreme HTS.” According to Bruner, by the end of the year Panasonic expects to have “86 percent of airline flights routes covered with HTS” and by 2020, 80 percent with extreme HTS.

Don Buchman, vice president and general manager of commercial mobility at ViaSat, is also looking to HTS to provide connectivity to customers. And not unlike Bruner, he believes the key is “having the right capacity in the right places.” ViaSat first began to play in this market back in the 2000s, when “business jets had expensive and poor connectivity,” Buchman said. Now the company hopes to scale connectivity to all aircraft passengers, and for Buchman, his first priority is keeping up with demand for capacity to achieve what he calls a seamless experience. “People are using mobile phones, laptops and iPads, and they want to be able to do the same things wherever they are,” he said.

Thales is pushing toward a similar goal, says William Huot-Marchand, vice president of global sales and international operations. His vision is for IFC to become as much of a staple on aircrafts as water — but he believes it will take time for the technology to mature enough to meet passenger’s expectations. “Streaming is becoming huge. Today we can see the technology we offer our customer does not meet this demand,” he said. Ultimately, Huot-Marchand hopes to bring to airlines “a real connected experience in the aircraft as you have at home.”

Thales already owns a slice of market share with equipment onboard airlines such as JetBlue, and last fall the company announced a partnership with SES to create a constellation of satellites bringing connectivity to the Americas.

Bruner underlined that, because this pocket of the industry is still so young, airlines are still experimenting with various business models to pinpoint the most cost-effective methods. “Some of them have different opinions about levels of service,” he said, highlighting connectivity in coach versus first class as an example. “We offer the ability for the airline to decide what type of service they want almost down to a per-passenger basis. This allows the airline to build a solution so they can target and differentiate their products among individual passengers and aircraft, and even among other airlines,” he said. Buchman also emphasized the immaturity of the market, which he says results in “radical differences from supplier to supplier in coverage capacity, regulatory approvals, and so on.”

The panel generally agreed that hardware is where things get a little messy. “Antennas are the Achilles heel of the aviation sector [because] you have a very small aperture. You want it flat so it doesn’t impact the aerodynamics of the aircraft,” Bruner said. “Even small improvements in antenna technology can have a dramatic effect on the cost of megabits delivered to a user on an aircraft.” Unfortunately, the sluggish development of terminal equipment has been a hindrance.

Furthermore, Bruner pointed out passengers are consuming more and more bits but don’t want to pay for it. Here, Buchman sees a parallel between aircraft and previous trends in rail and hotels, which now mostly offer complementary connectivity via 4G and Wi-Fi respectively at no additional cost to the consumer. In other words, connectivity has become just another amenity.

“Primarily it’s been airlines purchasing the terminal equipment that goes on board,” Bruner said, and now those companies must figure out how to balance the cost of hardware with pressure from consumers to offer connectivity for free. “Part of our responsibility now is delivering a low-cost service so it’s not a tremendous expense for the airline,” he said. VS