Report: IFC will recover in time

  •   
  •   
  •   

Satellite-delivered in-flight communications (IFC) and entertainment, currently being “seriously disrupted” according to a report from Northern Sky Research (NSR), will recover over time.  The IFC market depends on airline passengers and the cruise ship sectors for the bulk of its revenues.

The report, in essence, asks when will the turnaround occur? It answers by saying: “10-Year Growth to Approach 10 per cent, Propelled by Aero Market Rebound and Long-Term Requirements for Connectivity.”

“Covid-19 has resulted in an unprecedented, sudden drop of capacity and service demand from grounded aircraft. With the pandemic impact likely to persist for at least 18-24 months, service providers are now forced to (re)visit their fixed leased capacity contracts/costs,” states report author and NSR Analyst, Vivek Suresh Prasad.

NSR’s Aeronautical Satcom Markets, 8th Edition report projects a viable long-term In-flight Connectivity (IFC) market, despite significant near-term challenges due to COVID-19.  Coming off a challenging 2018 and 2019, 2020 has already seriously disrupted the IFC market, with air traffic down by at least 80 percent in most regions. However, longer-term opportunities remain – once air travel resumes, planes will still require ever more connectivity, yielding a market opportunity more than 2x larger than 2019, with $5 billion in annual retail revenues by 2029.  The next 24 months will be a challenge, no doubt – but IFC plans are largely delayed, not cancelled,” says NSR.

“Right now, is an incredibly challenging time for all satellite mobility markets – and Aeronautical IFC has the most significant near-term headwinds,” adds Brad Grady, NSR Principal Analyst, Mobility. “Yet, NSR is largely optimistic on the longer-term uptake of Aero IFC services – passengers require connectivity now more than ever.”

“Covid-19 has resulted in an unprecedented, sudden drop of capacity and service demand from grounded aircraft. With the pandemic impact likely to persist for at least 18-24 months, service providers are now forced to (re)visit their fixed leased capacity contracts/costs,” states report author and NSR Analyst, Vivek Suresh Prasad. “

Overall, Business Jets continue to be a bright spot, and longer-term Commercial Aviation markets will be the revenue driver – in total generating $37 billion in cumulative retail revenues over the next ten years. The migration from FSS to GEO-HTS will continue, and adoption of “Free Wi-Fi” is a significant driver for long-term capacity demand. MSS/L-band will continue to fuel operational connectivity, while General Aviation is on a growth-path for greater adoption rates. Bottom Line, while today is quite challenging, and long-term fundamentals continue to point towards more IFC adoption – weathering short/mid-term uncertainty will be the key challenge for the Aeronautical Satcom sector, states NSR.


  •   
  •   
  •   

You must be logged in to post a comment Login