Can Next-Generation Satellite Networks Make In-flight Connectivity Free?
In-flight Connectivity providers are shifting into their third, fourth and fifth generation networks, but a question among airlines remains, whether those networks will come at a price point that allows passengers to connect for free.
In 2021, although airline passenger demand remains well below pre-COVID-19 levels, those passengers who are still getting onboard planes and those waiting to return to the skies later in the year are likely to find a requirement for a fee in order to access the Internet on average regardless of region.
The fee is a result of the costs faced by the airline in subsequently modifying their aircraft with equipment to enable in-flight connectivity (IFC) and then paying for the bandwidth required to provide passengers service through that same equipment over the 15 to 20-year lifespan of their jet. According to several IFC satellite service providers that participated in the Dec. 2 Connected Aviation Intelligence virtual panel discussion, "Next Generation In-flight Connectivity Networks," those at the top of the satellite IFC food chain are striving to make free IFC a reality, but making it free to every passenger that wants it, is a challenge.
Although there are also those, like Manik Vinnakota, director of commercial and product development for Telesat, who believe free IFC is not a futuristic goal, but already a reality. Vinnakota told the Connected Aviation Intelligence audience that airlines who are not currently providing it for free are going to have to figure how they can, either through value-added partnerships or reduction of service and equipment price points.
"A number of airlines are already offering free, that boat has sailed. The question airlines are dealing with is how to make it happen without burning through a pile of cash," Vinnakota said.
The number of airlines providing free in-flight Internet is still rather limited and varies. Air Canada for example, gives business class flyers free access to the Internet while economy class passengers pay in a tiered access model. On flights operated by JetBlue, passengers can access a free option of their FlyFi IFC that is sponsored through a partnership with Amazon or the speedier FlyFi+ version for nine dollars per hour.
In July, Lufthansa announced it would start giving access to Wi-Fi free of charge to Deutsche Telekom mobile network users on Eurowings and Austrian Airlines regional flights. Other airlines have established similar exclusive in-flight Wi-Fi enabled services with mobile network or phone companies such as American Airlines’ free access to Apple Music for iPhone users. Although access to Gogo IFC on American Airlines flights still requires hourly usage charges to passengers.
Telesat is one of the uniquely positioned global operators of satellites that has primarily been involved in providing IFC service through backhaul agreements with aviation service providers who make equipment and service available to operators. Their aviation service provider partnership list includes Global Eagle, Gogo, and Panasonic Avionics. According to Vinnakota, Telesat is currently looking at commercial aviation in two different ways, including a first model that features their current relationships today with airlines through the aforementioned service providers.
However, the second model is the one that can be enabled within the next year through the 300-satellite Low-Earth Orbit (LEO) network they plan to launch with the first 78 expected to become available next year and the full -scale network to come onboard by the end of 2023. Because of the leap in data rates that will become available through Telesat LEO, which the company wants to perform to the level of fiber, the Canadian global satellite operator expects airlines to increasingly seek more ownership over the experience that they provide leading to more direct conversations with Telesat.
"Today bandwidth is not used very efficiently. You have to buy a beam here, and buy a beam there and if you don't fill up the beam then you're paying twice and you're not even using all of it. With Telesat LEO we want to make the market forget that there are satellites, just forget that there are even satellites there. Fly wherever you want, you have a dense airport or flying over the Poles, just worry about paying for your service, and serving your aircraft and don't worry specifically as much about buying capacity as much as you have to today," Vinnakota said.
Knowing that airlines are hyper-focused on justifying the cost of equipment and service for any new technology coming into their aircraft, Vinnakota said Telesat has been working with its aviation terminal, antenna, and other equipment suppliers to reduce the direct purchasing and other associated costs of IFC equipment as well.
"On the hardware, we're trying to work with the hardware manufacturers to reduce the cost but then also other inefficiencies to reduce the elements that add to the cost, such as getting things certified, or getting things STC'd or line fit. There's a lot of duplication in the value chain today that adds up to more cost to the airline," Vinnakota said.
Telesat will still have plenty of competition remaining in the IFC space, including Intelsat’s stronger position in the market through its acquisition of Gogo’s commercial aviation IFC business. Panasonic Avionics signed a multi-year agreement for Ku-band capacity on two multi-beam payloads on the EUTELSAT 10B satellite, due to be launched in 2022. The agreement enables Panasonic to provide multiple gigahertz of new extreme throughput (XTS) Ku-band connectivity to airlines and their passengers flying over a wide area across Europe, Africa, and the Middle East.
SES is another operator competing in the next generation IFC network race, as they prepare to launch seven satellites for their 03b mPOWER medium earth orbit (MEO) constellation this year. The new constellation will have 30,000 fully-shapeable and steerable beams that can be maneuvered in real-time to adjust to changing bandwidth needs.
Reza Rasoulian, vice president of Hughes Network Systems, represents another global satellite operator that could both be a partner and competitor within the next generation IFC ecosystem and also participated as a panelist with Vinnakota on the Connected Aviation Intelligence panel. Hughes most recent next-generation development came in the form of a new strategic collaboration with Inmarsat that will make their two satellite networks available as “GX+ North America” in-flight connectivity (IFC) for airlines flying in the U.S., Canada, and Mexico.
GX+ will be enabled by Hughes JUPITER gateways and modems and leverages their existing Ka-band High Throughput Satellite (HTS) fleet as well as next-generation JUPITER 3 technological elements in development. In a similar fashion to Telesat, Hughes provides backhaul connectivity to traditional IFC service providers such as Thales, Global Eagle, and now Inmarsat.
“Interoperable hardware for airlines is important and we're very open in the sense of the Jupiter technology being proliferated via multiple operators, we have relationships with pretty much every satellite operator out there and most of them have already adopted JUPITER technology,” Rasoulian said.
A major step toward more interoperability will come through the GX+ architecture, which will feature a "dual aero" aircraft modem that is capable of working on both Inmarsat and Hughes satellites while selecting the optimal satellite path to reduce the amount of service reduction experienced by passengers.
According to Inmarsat, prototype flights for GX+ North America began last year, with commercial availability of the new network scheduled to become available in 2021. When asked whether JUPITER 3 or GX+ can enable free in-flight Internet service for airline passengers, Rasoulian said that comes down to the airline and how it justifies the cost of providing the service to passengers.
"It's airline-specific. There are certain airlines that want to differentiate themselves more than others and one of the value-added items is connectivity, to the extent that that can fill seats and they can charge a premium, the ecosystem needs to make sure they have the right amount of capacity and tools to enable that," Rasoulian said. "Because on average the take rate does go up if there is a free service because I think the demand does exist, passengers do want to be connected. If it’s free I'm going to connect, and the nuance there is how much capacity is being used and whose best positioned to provide that capacity at a value justified by the airline."
Interoperability between different hardware and service providers is also a goal for Intelsat as they move forward with control over Gogo’s commercial airline business.
Khali Heath, Principal Product Marketing Manager, Intelsat, who also participated on the Connected Aviation Intelligence panel, said that free IFC is a goal they're working toward but that no business model has proven successful yet on a major industry-wide scale.
"It hasn't been proven on a large scale today to be able to roll out free Wi-Fi to everyone. Airlines are struggling with whether they put their net promoter score or brand on the line to say that they offer free Wi-Fi, and if it comes out to be a less than satisfactory experience that negatively impacts them in the long run," Heath said. "Providing the type of value that allows free connectivity for passengers on a wider scale is a challenge we still need to resolve."