The Business of Passenger Experience
The first Virgin Atlantic A350-1000 is starting to come together in Toulouse, France. Parts for MSN 274 are arriving at the final assembly line and there's an interesting surprise atop the aft fuselage section: A radome.
“Inflight connectivity doesn’t just create revenue, it could save the airline industry US$15bn a year.”
That’s a bold claim from Inmarsat and the research it commissioned from the London School of Economics (LSE). Much of the savings comes from better weather forecasting and the associated effects: reducing delays and fuel burn. Part of the forecast savings comes from predictive maintenance opportunities, allowing the plane to track its own performance and use on-board connectivity solutions to report back to headquarters when operations are less than nominal. The so-called Internet of Things for Aviation (IoT/A) has long been held up as the financial savior of the connectivity platforms, delivering the necessary financial support to justify installations. What will it take to realize the $3-46bn in annual savings the research revealed? A lot of work, and it is unclear which connectivity vendors are truly committed to that effort.
Connectivity installations slow slightly over the summer, allowing an opportunity to take a big picture look at the industry and where the various players sit in terms of connected aircraft and future commitments. Compared to a year ago some players have shifted positions, even as the total committed count increases. The latter is definitely good news for all involved while the former is better for some than others.
It is just one small line inserted into today's Viasat earnings notes, "... total next-generation IFC system installations to around 200 aircraft across eight commercial airlines." The 200 number is nice, but the eight is more significant.
American Airlines will take the Viasat Ka-band inflight connectivity solution on its A321neo fleet when deliveries begin in 2019. The 100-aircraft deal was secured in recent weeks and announced by Viasat as part of its quarterly earnings release Thursday afternoon.
Inmarsat reported its first half financial results this morning in London with one surprising bit of data: The GX commercial aviation service finally started generating airtime revenue is Q2 '18, more than a year after entering service on some commercial aircraft.
Just how many aircraft carry inflight connectivity hardware? And which kit?? A pair of announcements this week gives greater insight into which kit is where and how the market is shifting, rapidly in some cases. Not that installation number 1000 matters more than number 999, of course. Yet somehow it does. Just a little.
Finnair joins the rapidly growing collection of European airlines offering inflight internet connectivity on its regional flights. Thanks to Viasat and Eutelsat passengers can now connect on some flights with more aircraft coming online over the coming year.
The launch of inflight wifi connectivity on Spirit Airlines presents many questions about the business model associated with that deal. Earlier this month, on the sidelines of the IATA Annual General Meeting in Sydney, Dominique Giannoni, CEO of Thales InFlyt, spoke about the arrangement and why just focusing on the contract terms doesn't really answer the bigger questions around how the service will operate and prove profitable to both parties.
Partners are important. But Viasat is not deterred by its lack of partners when it comes to developing the global ViaSat-3 constellation of Ka-band satellite connectivity. Indeed, the wait while searching for a partner on one of the satellites may prove beneficial when it finally launches.
