Over 23,000 commercial aircraft will offer in-flight connectivity (IFC) to their passengers by 2027, up from 7,400 aircraft in 2017, while IFC revenues for connectivity providers will hit nearly US$9 billion that year, according to a new Euroconsult report.
“In January 2018, around 90 airlines had either installed or committed to install IFC solutions,” said Pacôme Revillon, CEO. “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.”
Revillon added: “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. 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 will be a game changer and that revenue per aircraft per year will rise consistently in the coming years to match ever-increasing need for more bandwidth. The report also suggests that the need to improve profit margins, and to benefit from economies of scale, will favour vertical integration and consolidation in the IFC value chain.
Competition will be strong between leading suppliers and new entrants, with Euroconsult’s research benchmarking the positioning of main market players including Panasonic Avionics, Gogo, Thales InFlyt, Global Eagle, Inmarsat and ViaSat.
The report’s authors believe that beyond cabin connectivity, the next 10 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 the Internet of Things, Big Data, analytics, cyber-security and so on.
