With a mission statement of “Internet access everywhere, for everyone” OneWeb has plenty of markets where it can deliver its product to excited customers. Going forward the company wants commercial aviation to be a large part of that conversation. The company is starting to talk in detail about its plans for joining the market, and its targets are significant.
What we really want to do with the capacity, the coverage, the low latency, is to change the view on what inflight connectivity can be. We don’t want to be just another IFC vendor coming to the market. This is actually what airlines and passengers are looking for as a solution.– Ben Griffin, OneWeb VP Commercial Aviation
Speaking on the sidelines of the World Aviation Festival in London this week the newly hired VP for Commercial Aviation Ben Griffin was not shy about what he expects the company to accomplish. Nor about the challenges that come with those plans. Ultimately the company’s opportunity is driven by getting the satellite network online. The initial satellites are in space today and some regions will have service in the near future. But aviation requires a global footprint. For OneWeb the plan is to have the network ready to serve customers on that level in 2021. Between now and then OneWeb will be working with several partners to build up its aviation capabilities, with an expectation to deliver a terminal/antenna kit to airlines shortly thereafter.
The decision to use partners for most functions is one built on a review of the market’s history. Letting the best suppliers deliver their solutions and integrate into the OneWeb ecosystem should help the company meet its time to market schedule. This includes getting an electronically steered antenna (ESA) solution that is functional and priced right for the aviation segment within that timeline. Since the big splash Kymeta made in the aviation sector in 2013, still unfulfilled, ESAs have come up short year after year. Griffin is unfazed by that track record. Noting that the company is in advanced conversations with its antenna partners, Griffin notes that he “wouldn’t be mentioning those dates if I wasn’t sure we’d be able to meet them.”
A different type of solution
Capacity matters, of course. But with a low earth orbit (LEO) constellation Griffin sees two other, more significant factors where OneWeb can deliver. The solution will be truly global, including polar regions. That’s an important factor for a number of airlines as the number of polar flights continues to grow. The significantly lower latency of the LEO network enables a new level of services for passengers and for airline operations. That latter category, long talked about as the silver bullet that will finally make the IFC market profitable, remains an elusive financial or even technical play. Griffin is ready to get flexible around the business model of the OneWeb aviation solution in hopes of finally meeting that challenge.
The key is having an adaptable, malleable solution to what the airline needs, really, truly understanding where the value comes from at the airline level and it is probably not just providing passenger WiFi. There is a whole bunch of other stuff that is talked about loosely but never really explored any further. We really want to look at that. We want to deliver greater value with greater flexibility and simplicity…It shouldn’t be a headache that a customer says, ‘We have to provide wifi to the passengers and it is going to cost so much.’ It should open a lot of doors not just for the passengers but also for other parts of the operation.
With a few years yet before the system will be installed on aircraft, Griffin’s team has time to work through the various operational data sets available. Getting beyond the theory of such opportunities and into real implementations is the goal.
A different type of revenue model
Griffin also calls attention to the large portion of the airborne fleet that is unconnected today. There are plenty of reasons for that, but the business model remains a significant factor. For service providers the larger airlines represent a more reliable and stable revenue stream and those are the customers likely to be seeking out the connectivity services. Griffin wants to go after “airlines that don’t quite understand what they want to do to enable the improved passenger experience, the digital ecosystems.” Converting on that could prove lucrative, though it is a much harder transaction to close.
It is not up to me to decide what inflight connectivity is over the next 5-10 years. It is the customers who demand it. It should be something that you don’t notice it being so good because that’s what you expect. It is important from our perspective that it works, is dependable and is exactly as you’d expect it to be, not just from our perspective but also because the airline brand suffers if it doesn’t always work. And the airlines are acutely aware of that.
Reading between the lines the idea of “opening up markets that are underserved” whether LCCs or smaller airlines, appears to focus significantly on a lower cost for delivering the service on the planes. That comes from a mix of being newer and getting to leverage the learnings of prior implementations along the way. Bandwidth costs are coming down with each new generation of satellites, but demand is increasing, offsetting that potential savings. Griffin is focused on the “much greater value and flexibility” of his company’s raw capacity rather than the price.
One might also jump to the conclusion that OneWeb is ready to buy its way into the market. Financing the upfront installation is a significant capital cost for airlines and many vendors have covered those costs, hemorrhaging cash along the way. Those established players have mostly stopped that practice, meaning a new supplier willing to do so can easily snag aircraft installs. Griffin is not yet ready to commit one way or another on that front, noting that the company is “not far enough down the line yet to fully understand the customers and their requirements around funding the hardware.”
While Griffin has the background to know the challenges his company faces in the aviation market that’s no guarantee that it will be able to solve all of them, certainly not in a financially viable manner. Building from scratch gives OneWeb some advantages. So does the other business segments that will also generate connectivity revenue while the aviation group gets off the ground. But aviation is also a market that depends heavily on seeing proof not only that a solution works, but that it works in the segment with other airlines. Assuming Griffin can deliver the functional product he’s talking up these days, getting over that last hurdle should be a relatively easy challenge.
More from the 2019 World Aviation Festival
- Are these the best airlines on social media??
- OneWeb plans faster inflight connectivity network
- SkyFive targets ATG network expansion on a global scale
- PaxEx Update: World Aviation Festival 2019
- Aeroplan seeks a hybrid loyalty solution with program relaunch