Last week's anomaly on the Intelsat 29e satellite took the Ku-band system temporarily offline. Further details now suggest that a recovery is increasingly unlikely. While that has a short-term impact on the inflight connectivity market a deeper review suggests that the overall exposure could be mitigated relatively quickly.
Gogo appears to have solved its most significant short-term challenge, with a $900mm debt offering lined up to provide five years of breathing room as the company inches towards a positive free cash flow.
What happens when gigabits of capacity goes offline? Passengers and inflight connectivity providers alike are about to find out. Intelsat 29e, the first of the Epic Ku-band High Throughput Satellites, suffered a fuel leak on 7 April 2019, followed by a second issue on 9 April. The satellite is in "safe mode" meaning all customer-facing services are disabled as the operator seeks to address the problems. This represents a significant hit to Ku-band capacity over the Americas and the North Atlantic Ocean.
Where and when will inflight internet finally take flight in India. A pair of players – Inmarsat and Global Eagle – are leading the charge to deliver connected aircraft in the region. At the Aircraft Interiors Expo in Hamburg last week both vendors provided updates on their efforts, with neither appearing likely to fly in 2019.
The only official announcement around electronically steered antennae (ESA) for commercial aircraft this week at Aircraft Interiors Expo in Hamburg came from Gogo. And it probably was the least significant ESA story from the show. Instead, a surprise from a different supplier stole the spotlight.
Inmarsat's financial future appears secured. A consortium of investors is poised to invest $3.4bn in the company, taking it private. The price tag represents a 45% premium from the trading rate on the day prior to speculation about the deal becoming public and 27% to the price when the official offer was published. Inmarsat's Board of Directors unanimously recommends the deal and committed their respective shares to vote in favor. The investment group is operating under the name Triton Bidco and is backed by Apax Funds, Warburg Pincus Funds, the Canada Pension Plan and the Ontario Teachers' Pension Plan.
Another quarterly earnings report from Inmarsat and another bullish report on inflight connectivity revenue. The group reported IFC revenues more than doubled to $101.3m for the full year. As revenue and install count continues to grow Inmarsat is optimistic, though the underlying numbers suggest the potential remains unrealized.
When one or two executives leave a company it doesn't usually make the news. When it is a handful all at once eyebrows start to raise. After last week's news of one such shake-up in the inflight entertainment and connectivity world, however, the company's CEO says this is simply business as usual, finishing up a restructuring started in 2018.
The wheels of justice may turn slowly, but they press forward as Viasat continues its efforts to see Inmarsat's European Aviation Network (EAN) shuttered. The company won a ruling in Belgium that will see some of the open questions passed to the European Court of Justice (ECJ), reaching the top legal threshold and potentially putting an end to the wrangling. Alas, no one expects the answers to come quickly.
Work as a senior executive in the inflight entertainment and connectivity business can be a fragile position. As the companies in the space continue to come up short on consistent and stable profits the likelihood of a sudden shift remains very real. Reports in to PaxEx.Aero suggest that just such a shift is underway at one of the leading providers in this segment.