Posted on: 15 June 2017
Valour Consultancy’s Craig Foster, a specialist in IFEC market intelligence, outlines the background behind their latest report on in-flight connectivity within the business aviation sector.
Last month, Valour Consultancy released its latest analysis of the market for in-flight connectivity on VIP and business aircraft. The study draws upon our considerable expertise in analysing the adoption of in-flight connectivity (IFC) in commercial aviation and is the result of a rigorous primary research phase consisting of numerous interviews with key players from across the industry.
The report finds that, globally, there were 19,131 IFC systems on VIP and business aircraft at the end of 2016. L-band was by far and away the most dominant connectivity technology with cumulative connections representing 75% of the total. A large proportion of this is accounted for by Iridium, whose systems support in-flight satellite phone operations on almost 10,000 aircraft. The remainder of L-band connections are accounted for by Inmarsat, which has seen adoption of SwiftBroadband (SBB) pick up rapidly in recent years.
Uptake of Gogo’s Air-to-Ground (ATG) options has been similarly brisk in recent years. By the end 2013, there were 2,047 terminals connected to the Gogo Biz network. This had increased to 4,172 three years later.
ATG and L-band both have room for further growth in coming years, too.
With respect to ATG, there will likely be continued interest in Gogo’s solutions over the course of the forecast period (2016 to 2026), especially now that the company is close to commercial launch of Gogo Biz 4G and plans to have its next-generation ATG network, which will offer peak network speeds of more than 100 Mbps, up and running by 2018.
When you add SmartSky Networks and its 4G network into the mix, as well as the Inmarsat European Aviation Network (EAN), it is apparent that there remains plenty of potential for ATG technology. Though it is yet to be officially confirmed whether the EAN will be used by the business aviation industry, there appears to be consensus that it would work very well on board private aircraft.
While Inmarsat is reportedly seeing a lot of interest from operators looking to upgrade from lower-bandwidth IFC systems to Jet ConneX, the company is also working on increasing the performance of the L-band technology used for SBB. Iridium, meanwhile, is currently prepping for the launch of the second batch of Iridium NEXT satellites, which are due for lift off on the 25th June. Upon completion of the constellation in 2018 and the start of commercial service one year later, the so-called Iridium Certus solution will likely find favour among operators of those small- and medium-sized business jets less suited to the fitment of bulky radomes.
Adoption of Ku-band technology on VIP and business aircraft appears to have an equally rosy future – a view presumably shared by new market entrants, Panasonic Avionics and Global Eagle, as well as Gogo, which recently announced its first business aviation customer for 2Ku. Right now, there are some 500 Ku-band systems in operation on VIP and business aircraft and the vast majority of these are accounted for by ViaSat and its Yonder system (although it’s no longer referred to as Yonder, to shift the focus towards the ViaSat brand). Panasonic and Global Eagle representatives have not been shy in admitting that they are gunning for ViaSat in this market.
However, ViaSat appears content to focus on ensuring existing clients migrate to its Ka-band technology – a sensible strategy given the ongoing success of its Exede in the Air product in commercial aviation. Now that ViaSat-2 has finally launched after several setbacks, there will soon be a considerable amount of additional Ka-band capacity for business jets flying between North America and Europe. Additionally, the company says that it will have its three planned ViaSat-3 satellites operational around 2020 making ViaSat the only rival provider of global Ka-band capacity to Inmarsat.
By 2020, ViaSat could have some catching up to do if the take up of Jet ConneX is anything to go by. Having debuted in November 2016, there were an estimated 30 aircraft fitted with the solution by the turn of the year. Inmarsat has previously stated that it expects to see 150 Jet ConneX-equipped aircraft by the end of 2017 and has a goal of connecting 3,000 jets by 2020 (although it is apparently now upgrading its forecasts).
Overall, we are forecasting that by the end of 2026, there will be 37,710 IFC systems installed on VIP and business aircraft – almost double the current total. The reader should, of course, note that these numbers do not refer to the number of aircraft with IFC. In fact, it is estimated that today, around 1,000 to 2,000 aircraft with Iridium satellite phones also make use of Inmarsat’s SBB network. Likewise, Gogo has publicly reported 4,172 connections to its Gogo Biz service and acts as the service provider for 5,286 installed Iridium terminals as well as 214 installed SBB terminals (a total of 9,972 connections – all accurate and up to date at the end of 2016). However, the firm delivers services to 7,400 aircraft implying many are flying with more than one system installed.
The following factors have driven interest in IFC on VIP and business aircraft and will continue to do so in future:
- Owners of business aircraft fitted with connectivity equipment some time ago will be keener to take advantage of more recent advances in satellite and hardware technology.
- The ‘Uber-isation’ of the private aviation industry is increasingly being talked about and with e-commerce replacing traditional methods of sourcing and booking a business jet, easy comparisons between different operators and aircraft means that customers can see where one aircraft has IFC and another doesn’t. This transparency will further encourage operators to improve their offerings.
- As well as the increased comparison between business jets and their features because of new e-commerce initiatives, business aviation is having to compete with the rapid adoption of IFC in commercial air transport perhaps making a first class connected seat more attractive than a private jet with no in-flight Wi-Fi.
- Competition is hotting up with the likes of Global Eagle, Panasonic Avionics, BizJetMobile and SmartSky Networks all new to the market or preparing to enter.
- The launch of several new high throughput satellites (HTS) and the prospect of cheaper capacity and faster services is having an extremely positive effect on the market with service providers having inked several new deals in recent years.
- The connected aircraft and e-Enablement is beginning to resonate more and more as a way to drive operational efficiencies and help underpin the IFC business case.
Some of the remaining challenges to more widespread adoption of IFC on VIP and business aircraft are as follows:
- Production of new business jets has stagnated and consequently reduced the possibility of line-fit offerability deals for many IFC providers and limited their opportunities for growth.
- Fitting an aircraft with a sizeable antenna to enable IFC impacts aerodynamics and increases fuel burn, thereby driving up operating costs. Additionally, many smaller business jets are currently unable to accommodate larger Ku- and Ka-band antennas on their fuselages.
- Current generation Ku-/Ka-band systems lock operators into the service provider (so the hardware is not provider agnostic) and should there be a desire to switch, a very expensive refit ensues.
- While commercial airlines tend to fly set routes at specific times of day, business jets are more sporadic. One day they may be flying domestically in the US, the next they may be making their way to China or Russia. This uncertainty means high-bandwidth IFC solutions that offer global coverage – which are currently few in number – are perhaps more compelling.
- Many in the industry are concerned that as we move towards realising the vision of the fully-connected aircraft, the opportunity for cyberattacks will increase. The main worry seems to be that such systems will allow wrongdoers to control aircraft and manipulate commands issued to the aircraft. It should be noted that flight control systems are purposefully isolated from all other communications networks on-board the aircraft.
- Selling an IFC service based on deployment events that have not happened is a significant challenge and operators understandably give much more credit to satellite assets in space than on paper. Further, a delay to the launch of any service has the potential to scare prospective customers away or send them into the arms of rivals. Unfortunately, such delays are all too commonplace for many much-anticipated IFC solutions.
Published in May 2017, “The Market for In-Flight Connectivity on VIP and Business Aircraft” provides an unrivalled insight and analysis into the current and future deployment of IFC on these aircraft. The number of IFC systems installed in 2016 is quantified with forecasts out to 2026 and data is segmented by fitment type, aircraft size, frequency band and geographic region with a full qualitative discussion of the key trends at play in support of this. The report also sizes the market for both service revenues and key enabling hardware, in addition to market share estimates for service providers and capacity providers. A chapter profiling key players is presented, too.
HMG Aerospace is a proud partner of Valour Consultancy, enabling us to offer market-leading intelligence in the IFEC and cabin technology sectors. For more information on how to purchase the latest reports, please contact firstname.lastname@example.org.