Airborne Again? The Future Post-Pandemic Mobility Horizon

The backdrop to this latest key themed exploration in the GVF-Satellite Evolution Webinar Series are two surveys related to the aero and inflight connectivity market. One survey, conducted in October 2020, offers us various important insights on the nature of airline passenger confidence¹. The second survey is active now and YOU can contribute to it with the possibility of winning a prize (see further details below)².

As alluded to in opening remarks by the moderator, pre-pandemic analyses and forecasts for the continued deployment of inflight broadband demand were buoyant. With the outbreak of the COVID-19 pandemic, the airline industry reduced commercial schedules as passenger demand slumped, concerns about social distancing and disease transmission arose, and government post-travel quarantine restrictions were imposed. By May 2020, the pre-pandemic optimism had evaporated and aviation and satcoms stakeholders did not anticipate recovery for a period of at least 18 months to three years. But now, as you will note below in footnote ¹, confidence levels seem to be rising and, as recently as October, 47 per cent of those surveyed say they intend to fly again in the next six months.

With these figures in mind, discussion began with a panellist’s overview of how the pandemic has impacted how business is now being conducted and their reflections on the pre-pandemic and contemporary forecasts that had already been referenced.

The following dialogue, arising from both moderator questions and additional “live” audience questions, ranged widely to encompass a broad sweep of topics, including:

• The merits and demerits of service provider models for operators to deliver optimum business returns for the aero connectivity providers;
• Feasibility studies in 5G cabin connectivity and associated applications;
• Cabin digitisation, ‘zero touch’ services, and passengers’ use of personal content as a behavioural shift enabling cash-strapped airlines the opportunity to reduce expenditure on content and use it for additional inflight connectivity bandwidth;
• How deployment of NGSO systems, and advances in flat panel antennas, will impact the mobility market;
• The significance of the business jet market in the context of pandemic;
• The nature of connectivity market interest in accelerating commercial adoption of HAPS technology, its cost-effectiveness and its competitive or complementary nature; and,
• The significance of the exponentially growing drone market in terms of its requirements for satellite bandwidth for command and control, and certain payload applications.

This 60-minute discussion provided a wealth of insights from the point of view of a satellite operator, a service provider, a content provider, and a global advisory-focused investment bank. If you missed the live event, watch the video now.

Q & A continued….

The following questions were posed during the webinar but there was insufficient time to respond during the one-hour duration of the event. Thank you to our audience for taking an active part by asking questions, and to our panellists for their time to answer them after the webinar ended…

1. I’d like to receive opportunity for Italian markets.

Tim Southard: We have seen only tentative inquiries from the Italian airlines, Alitalia and Neos, with a “wait and see” level of priority from both. Air France has a number of routes within Italy and has quality IFC.

Mark Richman: IFC opportunities are definitely available in Italy. Intelsat has a global network and through our service provider customers such as GEE, PAC and Gogo, we offer IFC services to airlines in this market today.

2. When you say “Viasat is the most richly valued company in the industry”, can you clarify? Does this mean stock valuation? Which industry are you referring to? Satellite? Satellite Operators? In flight internet providers?

Jim Murray: Viasat trades at a higher multiple of EBITDA than any other satellite operator.

3. Question for Bill at KenCast: How does content vary long, medium, short haul?

Bill Steele: There is no difference in content whether carried long, medium, or short haul. Intelsat employs an MPLS fiber optic backbone network that connects to 23 teleports globally that are used by the planes flying above them.

One example –

• KenCast delivers movies directly from the 7 major movie studios in Hollywood to KenCast servers in each of the 23 teleports via the Intelsat
• MPLS fiber network.
• The movies are then transmitted to the Intelsat GEO satellites and to a Thinkom flat panel antenna on the fuselage of each of several thousand planes
  o Down to a KenCast computer on the planes worldwide in flight or on the ground.
• Passengers on the plane then interact from their seats with the KenCast computer on their plane to play a movie.

We also deliver live content from the major TV networks to the planes similarly. All content, files and live streams, are delivered, to KenCast computers on the planes, securely in encrypted format, with high levels of Forward Error Correction. All content is then repaired/Error-Corrected, decrypted and made available on-the-fly as received, and available immediately to view in real-time.

Regarding what entertainment/news KenCast delivers to airlines, we do not distinguish by “How does content vary long, medium, short haul?” We deliver content most of time while the planes are in flight. Some of the content is delivered by hard drive to the planes while on the ground.
Short haul flights can take advantage of loading content by hard drive before take-off.

Most content is delivered by satellite while planes are in flight. Obviously live content (e.g., live video streams from NEWS networks) is typically delivered live in flight).

4. To Tim of GEE: You talked about the benefits of NGSO for an airline passenger, and thus an airline. What are your thoughts about the associated cost? Will airlines be able to integrate NGSO cost into a free-WiFi model? Or do you assume that the NGSO capacity will be priced at same per-MB cost to airlines as GEO systems?

Tim Southard: Thank you for the question. When buying at the scale of Global Eagle, we already see concrete dramatic reductions in cost per MB and/or bit. The differences are great enough to overcome the hurdle of up-front equipment costs. Furthermore, the difference is great enough to make the business case for cheap/free-to-passenger streaming-capable and VR & gaming-capable service levels.

Jim Murray: We think the market is progressing towards a free wi-fi model. NGSO systems promise a lower cost per Mbps for the airline. HOWEVER, that doesn’t account for retrofit costs for a new antenna.

Footnotes:

¹ INMARSAT 2020 Passenger Confidence Survey

The events of 2020 have altered the dynamics of the aviation industry. In the long-term, over eight in ten passengers (83 per cent) surveyed claim their travel habits will change – even once the pandemic has subsided. And when it comes specifically to flying, nearly a third (31 per cent) say they will fly less. However, while 80 per cent of respondents describe their behaviour in relation to avoiding COVID-19 as cautious (48 per cent say they’re ‘highly cautious’, with the remaining 32 per cent saying they are ‘fairly cautious), nearly two-thirds (65 per cent) of passengers expect to fly again in the next year. Indeed, 47 per cent say they intend to fly again in the next six months. See the full survey results.

² INTELSAT Inflight Connectivity Survey 2020
As the airline industry emerges from the COVID-19 pandemic, Intelsat remains committed to the advancement of Inflight Connectivity (IFC) and to engineering a Wi-Fi experience that exceeds passenger expectations. Rather than a return to normal, Intelsat expects that passenger demands will have changed, and welcomes your help in understanding these shifting trends by taking a few minutes to complete the survey Your personal information will remain confidential. Upon completion, you have the option to be entered into a raffle for a chance to win one of five US$50 Amazon gift cards. Please click here to take the survey.