Viasat cuts 800 staff; DT IFC deal
November 9, 2023
By Chris Forrester
Viasat of California, which also now owns London-based Inmarsat, made some bif announcements at its Q2 financial report; one satellite has been cancelled and 800 staff laid off.
Viasat stated that its results showcased “resilient growth and momentum” but was making key decisions on capital expenditure that will strengthen the focus on its mobility and government businesses.
However, the headline write-down of $900 million (€841.4m), which covered the two newly-launched but damaged satellites, has forced the business to make some significant decisions.
As for its ViaSat-3 Americas craft, with a damaged antenna, the company said it expected to receive a report by the end of next week as to the cause of the failure and possible future use of the craft. Viasat has a $421 million insurance claim pending on ViaSat-3 Americas which will be filed by the end of this year.
Mark Dankberg, founder of the company, said the report would also determine what should happen to the second satellite in the ViaSat-3 series. The second satellite, initially targeted for the Asian market, could then be launched with the fault corrected. However, the current headache on ViaSat-3 Americas means that the satellite might only be good for 10 percent of its designed throughput.
A third ViaSat-3, initially designed to serve the Europe/MENA market has antennas designed and supplied by a different manufacturer and should launch around this time in 2024.
Dankberg told shareholders that all work had ceased on ViaSat-4 and thus would save the company “millions” in CapEx.
As for the other lost satellite (Inmarsat-6 F2), it is fully insured for $349 million and an insurance claim will be made in the next few weeks.
Viasat’s financials showed $1.2 billion in revenue for the quarter-year to the end of September, up 85 per cent compared with revenue in the same period last year. Inmarsat provided $427 million of these revenues, reflecting year-on-year growth of 16 percent.
Viasat suffered a net loss of $767 million for Q2 of its fiscal year 2024, compared with a $70 million net loss in the prior year, mainly due to the write-down charges.
“Revenue visibility for the remainder of FY2024 and into FY2025 is supported by $1.0 billion of awards during the quarter, a 15% YoY increase from continuing operations, and $3.6 billion of backlog at quarter end,” stated Viasat.
A few hours before releasing its results, Viasat signed an agreement with Germany’s Deutsche Telekom (DT) to deliver In-Flight Connectivity for the European Aviation Network.
The long-term agreement with DT cements the companies’ commitment to providing in-flight connectivity (IFC) solutions to airline partners across the European Aviation Network (EAN). EAN was launched in 2019 and powered by DT and Inmarsat.
EAN combines S-band satellite coverage with a complementary ground component network operated by Deutsche Telekom. EAN is a unique example of European technological and regulatory leadership, which allows travellers in Europe to benefit from an advanced IFC experience for most intra-European flights, including broadband services that support high bandwidth demanding applications such as streaming. Deutsche Telekom operates more than 300 EAN sites in 30 countries across Europe, providing substantial infrastructure across the continent.
EAN uses small, low weight and low drag fuselage-mounted terminals, which can be installed on an aircraft in a matter of hours. This provides substantial cost savings while supporting sustainability initiatives and carbon reduction.
Since 2019, more than 140 million passengers have had the opportunity to connect in-flight through the EAN connectivity solution. Today, EAN is available on more than 290 aircraft across various airlines, including Iberia, British Airways, Vueling, and AEGEAN.
“Viasat remains fully committed to EAN, now part of our global service offering in aviation,” said Shameem Hashmi, VP/Aviation Strategy, Viasat. “The EAN in-flight connectivity solution is the right solution for certain fleets in Europe. We look forward to welcoming more airline partners to the network, so that additional passengers across Europe can benefit from a world-class in-flight connectivity experience.”
“The signing of today’s long-term agreement is a significant milestone for the continuation of EAN,” said David Fox, VP/Inflight & Connectivity Services, Deutsche Telekom. “Through operation and maintenance of the complementary ground component network, Deutsche Telekom will foster the continued growth of the service to reach more airlines and passengers, allowing them to stay connected throughout their travels within Europe.”