Airborne connectivity is becoming an important subject, capable of providing service differentiation and/or revenue generation for airlines, according to their business model. Following the demise of Connexion by Boeing (CBB) a number of companies have entered the market but a comparison with CBB is difficult due the varying claims that each is making. The result is a highly confusing picture for a potential customer, particularly under the current economic climate.
While the main airframe manufacturers remain optimistic on medium term sales, many industry analysts expect a growing probability that by the end of this year new aircraft may be coming off the production lines quicker than the market can absorb or pay for them. Last year’s fuel crisis has already contributed to the insolence of many struggling aircraft operators but the banking crisis had an even bigger impact. The difficulty to arrange finance continues to throttle growth in all aviation sectors over the coming months. Thus, the economic downturn is likely to reduce the number of immediate aerosatcom projects and to greatly affect their prospects for some time to come.
The main objective and scope of the study is to assess the commercial and technical feasibility of a number of non-safety (i.e. APC and AAC) aeronautical communication solutions and business models in order to identify the commercial viability and technical feasibility of current and emerging connectivity solutions for the Air Transport, Business Aviation and Government market segments.
Cost/Benefit evaluation criteria are:
- Type of services (Talk/Connect/View),
- Existing or required time to market,
- Price that customers are willing to pay,
- Cost that allows the business model to work for shorthaul & longhaul and across the three aviation market segments,
- Low-risk service provision arrangements,
- Industry Standards compliance and regulatory licences availability,
- Global coverage,
- With future-proof product evolution characteristics.
As many business analyses and market estimations have shown, the demand for in-flight satcom connectivity is attractive. Nevertheless the number of failed attempts to realise this opportunity is a concern. Additionally, the business environment and the infrastructure of the traditional service provider are undergoing a fundamental transition to a multi-service, multi-system business, converging on a mobile IP network architecture. Finally, despite the current gloom surrounding airline profits and passenger numbers, most industry analysts expect growth to return at some point – potentially leading to satellite network capacity issues.
As such, the project was focused on delivering guidance for an assessment of the success chances of current and emerging aerosatcom solutions and offerings, their key success indicators and their critical challenges. The project objective was to generate data and information with direct relevance for:
- Service take-up, terminals equipment fitted to date and volume of traffic generated,
- Evolutionary trends that will affect the devolvement of future non-safety aero-services,
- Identification of possible business scenarios that may have promising commercialisation prospects, taking into account:
- Aircraft types and quantities operating on SH or LH routes in Europe or in any other region of world,
- Private aircraft and business jet market operators,
- Number of new aircraft fitted over short, medium, long term,
- CSP offering services in collaboration with satellite and terrestrial mobile operators.
The Business Analysis and the associated Business Cases addressed:
- Revenue Potential – overall and per aircraft type
- Value chain models
- Investment required/Cost Profile
- Cash Flow and Payback Profile