Posted on: 20 June 2018 by Alexander Preston
Over 23,000 commercial aircraft will offer connectivity to their passengers by 2027, up from 7,400 aircraft in 2017, according to a new report from Euroconsult.
“In January 2018, around 90 airlines had either installed or committed to install in-flight connectivity (IFC) solutions,” said Pacôme Revillon, CEO of Euroconsult. “Offering connectivity was first seen as a differentiating factor, however as more and more airlines provide connectivity, offering in-flight Wi-Fi starts to become a must-have in order to keep a competitive positioning in the extremely challenging airline market.”
“In the current take-up phase, we have witnessed an evolution of the pricing models applied by airlines to their passengers, from free access to a premium applied by the hour, by flight or on a monthly basis, as airlines try to find the ideal business model to lighten the burden of connectivity solution provision,” added Revillon. “For airline connectivity suppliers, we estimate that revenues from IFC topped US$1.2 billion in 2017 and should reach $8.7 billion by 2027 for commercial aviation alone.”
The report ‘Prospects for In-Flight Entertainment & Connectivity’ suggests that the ability to support video streaming on a large scale shall be a game changer and that revenue per aircraft per year shall constantly rise in the coming years to match the ever-increasing need for bandwidth. The report also suggests that the need to improve profit margins, and to benefit from economies of scale, shall favour vertical integration and consolidation in the IFC value chain.
The report’s authors believe that 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.