In Flight Entertainment (IFE) and broadband connectivity, is a fast-growing business for airlines and their satellite bandwidth suppliers says a study from Euroconsult.
The Paris-based research organisation says more than 23,000 commercial aircraft will offer connectivity to passengers by 2027. This is a dramatic increase from the 2017 number of some 7,400 aircraft.
Pacôme Revillon, CEO of Euroconsult, said that in January of 2018, around 90 airlines had either installed or committed to install in-flight connectivity (IFC) solutions. Offering connectivity was first seen as a differentiating factor; however, as more and more airlines provide connectivity, offering in-flight WiFi starts to become a must-have in order to keep a competitive positioning in the extremely challenging airline market.
Euroconsult’s research confirms that installations will accelerate and that innovation will largely improve the in-flight experience. New generation satellite systems and air-to-ground networks will dramatically increase available bandwidth for aero customers. The IFEC industry is highly competitive and this competition brings positive fallout from a passenger’s standpoint: The cost per MB is continuously decreasing and customized value-added services allow an ever better customer experience.
“The increase in connected aircraft and in bandwidth consumption per passenger will support growth. To that respect, the ability to support video streaming on a large scale shall be a game changer. The revenue per aircraft per year shall constantly rise in the coming years to match the ever-increasing need for bandwidth. Still, the need to improve profit margins, and to benefit from economies of scale, shall favour vertical integration and consolidation in the IFC value chain. Competition will be strong between leading suppliers and new entrants, with our research benchmarking the positioning of main market players including Panasonic Avionics, Gogo, Thales InFlyt, Global Eagle, Inmarsat and ViaSat,” says Euroconsult.
“Beyond cabin connectivity, the next ten years will see the full emergence of the SmartPlane concept. Aircraft being more and more connected will start to support all the latest IT trends such as IoT, Big Data, analytics, cyber-security and so forth. Intensifying competition among the different stakeholders of the IFC value chain, in order to offer more bandwidth to the aircraft, will allow aviation to enter a new era with connectivity at its heart. Our research assesses the first signs and initiatives preparing for this major transformation in the aero sector.”
Revillon added that in the current take-up phase, an evolution of the pricing models applied by airlines to their passengers has been witnessed, from free access to a premium applied by the hour, by the flight or on a monthly basis, as airlines try to find the ideal business model to lighten the burden of connectivity solution provision. For airline connectivity suppliers, Euroconsult estimate that revenues from IFC topped $1.2 billion in 2017 and should reach $8.7 billion by 2027 for commercial aviation alone.