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APEX Insight: Thanks in large part to high-speed Internet provided by satellite, the money coming in from passenger connectivity will increase nearly eight-fold over the next 10 years. According to Euroconsult’s latest report, total revenues from passenger connectivity services are expected to grow from $700 million in 2015 to nearly $5.4 billion by 2025. With such huge profits hanging in the balance, competition will rise.

“At the end of 2015, 72 airlines had already installed or announced plans to install passenger connectivity systems on board, and the number of connected commercial aircraft had increased by 21 percent compared to the end of 2014,” says Geoffroy Stern, senior consultant at Euroconsult and editor of the report. At the moment, 72 airlines are either offering or planning in-flight connectivity (IFC). Overall, says Stern, watch for Asia-Pacific to add the most IFC-enabled aircraft by 2025, with Latin America and Europe surging as well. All three will chip away at North America’s current lead.


Click on image to zoom. Source: Euroconsult

Not only will high throughput satellites (HTS) be trafficking data at ever-higher speeds (think one terabit per second with the upcoming ViSat-3 constellation), that data will get cheaper as services scale… but will they scale? The answer, according to the Euroconsult report, is an emphatic “yes,” with several implied exclamation points. Gogo and Global Eagle Entertainment were pulling in up to $135,000 per aircraft in 2015 according to the report, which  suggests that that number could double within the next three years alone. Those sky-high sums hinge on higher data throughput (suppliers); as well as faster and hungrier consumption (passengers).

At the moment, only 6.2 percent of passengers are taking advantage of in-flight connectivity, says Euroconsult, ringing up an average revenue of $12.50 per passenger per session. Pricing is tricky, says Stern, who notes that an airline must find a balance between overpriced IFC that nobody uses, and underpriced IFC that gets congested when everyone in the cabin tries to jump on at once. “Overall,” he says, “no single model fits all airlines.”

Only 6.2 percent of passengers are taking advantage of IFC, ringing up an average revenue of $12.50 per passenger per session.

Nominal Bandwidth

Neither bandwidth capacity and consumption are what they might seem, though, warns Stern: “The average bandwidth available to a plane has to be shared between all connected passengers. This bandwidth must be managed to deliver a decent experience for everyone connected to the network. However, with bandwidth being a scarce resource, not all connected passengers are equal. They are differentiated by status and by the price they paid for Internet access. For example, a first-class passenger’s Internet communication sessions might have a greater priority than an economy-class passenger’s traffic.”

“With bandwidth being a scarce resource, not all connected passengers are equal.” – Geoffroy Stern, Euroconsult

The Euroconsult report also takes note of the “smart plane concept,” wherein connectivity isn’t just for entertainment purposes. Never mind your seatmate: The plane itself can be quite chatty, as well as a major data customer. We’ve seen this firsthand at the Consumer Electronics Show, when Panasonic showed off IFEC units capable of filing their own repair requests, as well as plane-mounted antennae gathering ever-larger amounts of weather data for some Ultra Big Data number crunching.

Panasonic, Gogo, GEE, Thales, SITA OnAir and ViaSat currently offer connectivity services for commercial carriers, however, the report notes that hardware manufacturers may well start selling solutions of their own. Meanwhile, as many as three times the number of current antenna providers could be vying for airline business before too long. This, says Euroconsult, will crowd the field when the current players are dealing with both innovation and operating costs, all while the airlines themselves iron out ideal monetization strategies.

Which Screen Will Reign Supreme?

So we know that passengers still prefer seatback IFEC experiences to BYOD, even as those brought-aboard devices become pretty much ubiquitous. Stern’s got no problem with that, noting that Euroconsult’s research finds that passengers and airlines alike see smart devices as complementary to the built-in IFEC experience. Second-screen viewing, in other words, can become as pervasive in flight as it is on your family’s couch. He says, “Connected personal electronic devices not only improve the seatback experience but also offer the opportunity for airlines to strengthen relationships with customers by interacting with them at every step of their journeys.”