In-flight connectivity revenue $32bn by 2026
May 23, 2017
By Chris Forrester
Two-thirds of all commercial aircraft are expected to be fitted with in-flight connectivity (IFC) by 2026, and this represents a potential $32 billion in revenue over the next decade as air travel continues to grow and passengers get used to the services.
The data comes from Northern Sky Resarch (NSR) in its latest study, Aeronautical Satcom Markets 5th Edition, which says that the imminent start of service by highly-touted High Throughput Satellites (HTS) will help meet the tall expectations of passengers for quality inf-light connectivity (IFC) experience at the right price.
Late Millennials and Generation Z passengers comprise an increasing portion of air travellers, and they will board with their social network on hand. No longer closed during flights, airplanes will become an Internet hub, where connecting with thousands of people is necessary and normal for passengers.” states Claude Rousseau, NSR Research Director and report author. As a result, the behaviour of this class of passengers will eventually drive the installation and utilisation of IFC as it becomes one of the box customers tick to choose their airline, says NSR.
NSR says the conversion of aircraft is already gathering pace, and one third of all aircraft will be IFC-equipped by 2019, and that with the start of satellite-based HTS services, the next three years will see steep growth such that by 2021, over 50 per cent of all the addressable commercial passenger aircraft market will have inflight connectivity served by conventional satellites or HTS.
“With HTS operator deals now being implemented globally, and with IFC take rates up and prices coming down, this will serve as an indicator of elasticity in a market where no entities serving connectivity are generating a profit.”
However, the NSR report also issues a caution. “One potential hurdle is the ban on use of personal electronic devices (PEDs) on some lucrative routes, which will put a damper on expectations for a few years. The mid-long term impact on this potentially expanding ban is still unclear, as any prolonged or expanded ban would have severe negative impact on the IFC market.