Intelsat Enters IFC Market in India Through Agreement With Nelco

Intelsat is entering the in-flight connectivity (IFC) market in India through an agreement with Nelco, a satcom service provider in India. Intelsat announced Thursday that the service is currently available on Intelsat partner airlines and their passengers on aircraft.

The agreement covers Intelsat airline partners with domestic and international flights to or from an Indian airport, as well as aircraft flying over the country. Jeff Sare, president of Commercial Aviation, said this opens the possibility for Intelsat to serve India’s domestic airlines with “untapped potential for IFC growth.”

Nelco will provide these services using Intelsat’s IS-33e high throughput satellite, which provides C- and Ku-band connectivity to parts of Asia, Europe, Africa, and the Middle East. Intelsat’s IS-33e satellite is approved by Indian government regulators.

“We are proud that Nelco has forged this relationship with in-flight connectivity pioneer Intelsat to offer aero IFC services on their customer aircraft,” said PJ Nath, managing director and CEO of Nelco. “As India’s leading satcom service provider offering best-in-class services, we are now creating a great opportunity through this relationship with Intelsat for further growth of our aero IFC services in the country in the coming years – and we intend to be a leader in this market in India.”

This is the latest IFC win for Intelsat, which recently announced a distribution agreement with OneWeb to offer a multi-orbit IFC service combining Low-Earth Orbit (LEO) and Geostationary Orbit (GEO) satellite capacity by 2024.

Euroconsult Expects 21,000 Commercial Aircraft to Feature In-flight Internet by 2031

The number of commercial aircraft featuring in-flight internet services is expected to double within the next decade, according to the latest in-flight connectivity (IFC) market outlook report published by Euroconsult. According to the report published earlier this month, there were 9,900 commercial aircraft connected to in-flight services by the end of 2021, and that number is projected to more than double to 21,000 by 2031.

“While not returning to pre-2019 levels, in-flight connectivity showed strong signs of uptake in the year with 120 commercial airlines offering in-flight connectivity to passengers with a total bandwidth capacity consumption rising to an unprecedented 24 gigabytes per second,” Euroconsult notes in their release of the new report.

The projected demand for connectivity on new commercial aircraft and the number of airlines offering in-flight internet services as tracked by Euroconsult was only a slight increase over what they projected and tracked in 2020. Last year, Euroconsult reported a total of 9,000 commercial aircraft featured in-flight connectivity (IFC) operated by 115 total airlines, based on data they collected in 2020.

The projected growth in the market last year was for that number to grow to between 16,000 and 20,000 connected aircraft by 2030. A year later, in their 2021 report, Euroconsult notes that a series of in-flight connectivity (IFC) service provider mergers and acquisitions have placed those companies in better financial positioning to pursue new contracts that lead to “as many as two dozen signed by the end of 2021 involving the equipping of a combined total of 1,500 aircraft.”

Among the most significant IFC-related mergers and acquisitions that have occurred in recent years include Intelsat’s acquisition of Gogo’s commercial aviation business and Viasat’s proposed acquisition of Inmarsat that is currently undergoing review by several international regulatory agencies. In July, Eutelsat and OneWeb revealed details of their own merger agreement that will bring together their satellite assets in Geostationary Orbit (GEO) and Low-Earth Orbit (LEO) for multi-orbit service.

Despite all the merger and acquisition activity occurring though, Euroconsult still expects the IFC market to become more competitive in the near future driven by “evolving technologies that are likely to drive down capacity pricing.” Euroconsult’s IFC researchers believe the adoption of “competition satellite constellation architectures”—such as LEO satellites—will lead to an upsurge in bandwidth availability.

Iberia Introduces Free EAN-Powered In-flight Messaging for Business Passengers

Iberia, the Madrid, Spain-based international airline, has rolled out free in-flight messaging for its business class and “Iberia Plus” passengers, powered by the airline’s fleet equipped with European Aviation Network (EAN) connectivity.

According to an update on the new amenity for its business class passengers recently published by Iberia, passengers that are Iberia Plus partners or traveling in business class will now have access to free messaging throughout the duration of their flight. In announcing the new program, Iberia highlighted that the free messaging is limited to mobile phone messaging applications and low-bandwidth emails.

“This new service makes it possible to share messages through WhatsApp, Telegram, Messenger and Facebook Messenger, and to send emails without attached files or images,” Iberia said in its new announcement.

The free messaging option is enabled by Iberia’s fleet of Airbus 320, A330 and A350 aircraft being equipped with EAN connectivity. Inmarsat and Deutsche Telekom celebrated the three-year anniversary of the European Aviation Network in March. The two companies describe it as the only in-flight broadband service to combine satellites with a ground-based LTE network.

EAN connectivity has been activated on more than 265 aircraft, including the entire British Airways short-haul fleet, while fellow International Airlines Group (IAG) subsidiary Iberia’s fleet is still being equipped with the service. In May, Deutsche Telekom and Inmarsat announced the installation of additional antenna sites in the North Sea to boost capacity for airlines connected to EAN that operate routes in that region.

Eutelsat, OneWeb CEOs Outline Plans for Combined GEO/LEO Entity

Eutelsat and OneWeb have reached an agreement to combine, bringing together satellite assets in Geostationary Orbit (GEO) and Low-Earth Orbit (LEO) for multi-orbit service. The companies announced the news early Tuesday, a day after sharing that talks were underway. Analysts told Via Satellite that they agreed with leaders from both companies that Eutelsat’s generative CapEx could help the combined company achieve its long-term goal of building a higher-capacity second-generation LEO constellation that competes with rival systems. 

The deal is a memorandum of understanding (MoU) to combine the companies in an all-share transaction. Eutelsat shareholders and OneWeb shareholders would each hold 50% of the Eutelsat shares.

Eutelsat and OneWeb said this will allow them to take advantage of growth opportunities for combined GEO/LEO satellite service. They project revenue for the combined company at 1.2 billion euros ($1.2 billion) in fiscal year 2022/23, with revenues growing annually in the low double-digits over the next decade, and mid-teen annual revenue growth over the medium to long-term.

“It represents a transformation for our company, creating a platform for strong growth for the next decade to come for the combined entity. It presents a unique, first integrated LEO/GEO player,” Eutelsat CEO Eva Berneke said Tuesday on a call with investors. “The deal is in line with our long-held commitment to continue to support OneWeb and step up when the occasion is right. The occasion is right now.” 

This another step in collaboration between the companies, after Eutelsat invested in OneWeb in April 2021, and upped its investment in October 2021. It is another example of large consolidation in the satellite industry among operators, as Viasat is in the midst of a deal to acquire Inmarsat. 

Details of the Transaction 

The transaction would be structured as an exchange of OneWeb shares by its shareholders (other than Eutelsat) with new shares issued by Eutelsat. Under this structure, Eutelsat would own all of OneWeb at closing, excluding a ‘special share’ for the U.K. government. OneWeb shareholders would receive 230 million newly issued Eutelsat shares representing 50% of the enlarged share capital.

Eutelsat said the MoU was unanimously approved by Eutelsat and OneWeb’s boards and long-term investors including Bpifrance, Fonds Stratégique de Participations, Bharti, the U.K. government, SoftBank and Hanwha. CMA CGM, a shareholder of Eutelsat, is also supporting the proposed combination. 

OneWeb will continue to operate its LEO business under its existing name and its headquarters will remain in the United Kingdom. Eutelsat will continue to be headquartered in France, listed on Euronext Paris and would apply to trade on the London Stock Exchange. 

Berneke, who took the helm of Eutelsat as CEO in January, will continue as CEO of the combined entity. Dominique D’Hinnin, chairman of Eutelsat’s board, would be proposed as chairman of the combined entity, with OneWeb board chairman Sunil Bharti Mittal as co-chairman. The full board would consist of 15 members including ten independent directors. Seven directors, in addition to the CEO of Eutelsat, proposed by Eutelsat, and seven directors proposed by OneWeb.

The transaction is expected to close by the end of the first half of 2023.

The LEO/GEO Opportunity  

The companies see growing demand for satellite connectivity, with the market at about $4.3 billion in 2020, growing to $15.6 billion in 2030, according to Euroconsult analysis. Growth is projected to come from consumer broadband, mobility, government, and fixed data. 

To meet this demand, Eutelsat and OneWeb the two companies are progressing on a joint technical and regulatory work for future hybrid GEO/LEO infrastructure including ground infrastructure, technology, and design of OneWeb Gen 2 constellation. 

“From a LEO perspective, this combination is very important by bringing together these two technologies. LEOs offer global coverage and low-latency connectivity. So there’s a combination of the two technologies that bring together high capacity, global coverage, high resiliency, and also importantly low latency. The combination of these two enables many use cases, and unlocks demand across multiple segments,” said OneWeb CEO Neil Masterson. 

The companies laid out a roadmap Tuesday to integrate their offerings, starting in the present with Eutelsat reselling OneWeb’s LEO capacity as a standalone product. By the end of 2022, they expect to bundle LEO/GEO for customers. In the next two to three years, they project a “mutualized network” with tools and next-generation antennas. The final step, four to five years out, is when OneWeb’s Gen-2 is fully operational it will support fully integrated offerings with intelligent routing capabilities. 

“We can make a much more efficient Gen-2 by combining the LEO/GEO assets together,” Masterson said. “What we’re seeing in particularly that we’re already serving, particularly [North of the 50th parallel] is that today we do not have enough capacity to to meet the needs of those markets — and that’s before the growth in demand that will be experienced in those markets. We are highly confident that as much capacity that we can provide will get consumed in those regions in particular.”

Eutelsat’s stable video revenues will support CapEx deployment for OneWeb’s Gen-2 constellation, Berneke said. 

“Broadcast, which is most effectively addressed by GEO, will represent 40% of revenues in the financial year ‘25. In spite of a slight erosion, it’s also a strong generator of cash flow to be reinvested in the high-growth verticals,” she said, outlining revenue of the combined company. Two high growth verticals are B2B connectivity, which will be the largest part of the business, standing around 50% of the combined revenues in ‘25. And then, B2C connectivity, which initially will represent 10% of revenue, with an even higher future cash generation potential.”

Cash-Generative Eutelsat Could Secure OneWeb Success, Analysts Say

The deal shores up financing for OneWeb’s higher-capacity Gen 2 constellation and diversifies Eutelsat’s revenues, which are heavily dependent on broadcast, analysts say. 

Nathan De Ruiter, managing director of Euroconsult, tells Via Satellite that Eutelsat’s growing focus on connectivity makes sense amid a decline in video revenues. 

“OneWeb has already secured several marquee distribution partnerships with a variety of ISPs and specialized satellite providers, substantially firming up its distribution network across most key vertical markets and regions, which is interesting for a global operator like Eutelsat looking forward,” De Ruiter said. “For OneWeb, having the cash-raising potential of Eutelsat going forward is key as it continues to invest in its constellation [including] gateway network, user terminal solutions, and as it progressively turns its attention to a second generation constellation to augment its competitive positioning.

Ben Lyons, a satellite equity analyst at Credit Suisse tells Via Satellite the deal signals that Eutelsat is increasing its exposure to low latency connectivity, which could help OneWeb succeed with a cash-generative business backing the venture. Lyons estimates the market has room for about three large-scale high throughput satellite (HTS) constellations before returns start to become value destructive, and this could secure OneWeb’s place.  

“We see this deal as a way for OneWeb to finance the Gen2 constellation given the limited throughput of Gen 1 and to pursue a multi-orbit strategy. I think the company is looking more long term than what they have right now,” he said. “If a Gen2 constellation is developed with higher throughput, I think we could begin to see some more interesting opportunities in the government and enterprise space. Multi-orbit technologies are expected to mature over the coming years and being able to offer that could be a unique selling point.”

Yet Lyons still has questions given the capital expenditure requirements likely needed going forward. “Strategically, moving into multi-orbit is a good move in terms of the customer offering, but unfortunately it very much does depend on the price. LEO constellations are very capital intensive and will require a very large amount of free cash to make those investments worthwhile. The combined group is guiding for average CapEx of between 725-875 million euros between FY24-30E. This is a doubling of the current CapEx envelope Eutelsat has, so they will need to grow revenues significantly over the next decade.”

This deal is a further example of horizontal consolidation in the satellite industry, after the Viasat/Inmarsat deal. More horizontal and vertical consolidation is expected, De Ruiter says. 

“The satcom industry has continued and perhaps accelerated its deep transformation in recent months in an increasingly competitive environment. Despite changes in the industry, horizontal integration deals have remained relatively limited in recent years, but vertical integration has accelerated in recent months as satellite operators increasingly focus on offering end-to-end services,” De Ruiter said. “With the rapidly growing importance of constellations in connectivity markets impacting the industry, an increasing number of players are looking at a multi-orbit strategy to expand their business. This could potentially lead to more horizontal consolidation in coming years.”

This article was first published by Via Satellite, one of the two publications behind the Connected Aviation Intelligence Summit. Click here to view the original article.

SmartSky Networks Crosses Nationwide Coverage Milestone for IFC Service

SmartSky Networks has achieved nationwide coverage for its in-flight connectivity (IFC) network, the company said in a July 27 announcement.

According to comments made by SmartSky President Ryan Stone, the IFC service provider’s initial customers are already flying and “using the service to send data off the aircraft as easily as they stream it on.”

“In concert, our world-class engineering team is using our software-defined network infrastructure to continuously fine tune for optimal performance and coverage,” Stone adds.

Some of SmartSky’s initial customers include recent deals with private jet operators FlyExclusive and Jet It, both announced earlier this year.

SmartSky’s network, which the company first started rolling out in 2015, features spectrum reuse, advanced beamforming, and 60 MHz of unlicensed spectrum to enable in-flight internet. There are a total of 250 IFC cellular towers enabling the entire SmartSky IFC network throughout the U.S.

The company notes that its IFC service plans include monthly data allowance levels ranging from 5 gigabytes (GB) to “unlimited and discounts for pre–payment and multi-year commitments.”

Malaysia Airlines Removes Seatback IFE Screens in 737NG Cabin Refresh

Malaysia Airlines revealed the upgraded interior configurations, seating, and wireless in-flight entertainment (IFE) changes to its fleet of Boeing 737-800 NG aircraft last week.

One key component of the cabin refresh for Malaysia is the removal of seatback IFE screens to transition to a wireless system that streams content to passenger mobile devices from onboard servers and wireless access points. Safran has also provided upgraded seating, and the airline has also included a “subtle infusion of Malaysian elements throughout the cabin,” according to their July 21 announcement.

Malaysia is branding its wireless IFE system as “MHstudio,” with the application to provide “preferred TV programmes, movies, podcasts, music and reading materials.”

Group Chief Marketing and Customer Experience Officer of Malaysia Airlines, Lau Yin May, commenting on the cabin refresh program, said the effort began in 2021 as a “bold step taken by the airline in response to feedback and suggestions received through customer surveys and various focus group sessions in 2020.

“This demonstrates Malaysia Airlines’ commitment to adapt to changing consumer needs and in improving overall customer experience in the post pandemic era,” May adds.

The first upgraded 737 cabins have already started flying, with the airline rolling out the upgrades to a total of 38 aircraft in its fleet over the next year.

Vistara Continues Investment in Digital Fleet Upgrades with Electronic Logbook

Vistara’s latest investment in digital technology upgrades for its commercial aircraft fleet will feature the Delhi, India-based airline’s adoption of Ultramain’s electronic logbook (ELB) technology, according to a July 25 announcement.

While Vistara has declared itself as the first airline in India to embrace ELB technology, the carrier is still seeking necessary approvals before fully making the transition to paperless passenger carrying operations. The selection of Ultramain’s ELB software comes several months after the airline upgraded its cockpit connectivity in February.

Sisira Kanta Dash, Vistara’s vice president of engineering and maintenance, commenting on the Ultramain investment, said the ELB will “be integrated with various live processes like [Aircraft Maintenance and Engineering Operating System] AMOS, [Aircraft Communications Addressing and Reporting System] ACARS, and ARMS for seamless operations. This application, with its completeness and ease of use, is one step towards building enterprise application integration while also focusing on sustainable operations.”

Ultramain’s ELB technology has increased in popularity among commercial airlines over the last decade with its ability to provide a paperless system-of-record for every system fault, repair need, and component malfunction on a per-flight basis. According to the company’s breakdown of how the ELB software works, it exists both within the tablets used by flight crews and onboard Aircraft Interface Devices (AID). This enables data about the performance and health of individual aircraft components and systems to be seamlessly shared between the mobile devices, onboard aircraft data acquisition systems, and ground-based maintenance information capturing and analysis systems used by airlines.

The company specifically references the Airbus A350 and the Boeing 787 and 777 as some of the aircraft models that the ELB software is compatible with in terms of standard in-production avionics systems. Avionica, Collins Aerospace, and Teledyne are also referenced by Ultramain as some of the avionics systems suppliers whose equipment the ELB software can use as a secure Wi-Fi access point to connect the aircraft’s databus network.  

Vistara’s selection of Ultramain is the second major airline deal announced by the company this year, following a similar ELB software agreement reached with Scandinavian Airlines System (SAS) in May.

Alaska Airlines to Launch Electronic Bag Tag Program

Alaska Airlines has become the first U.S.-based airline to commit to introducing an electronic bag tag program, according to a July 19 announcement.

The Alaska Air Group subsidiary has partnered with BagTag, a digital tag maker based in The Netherlands whose paperless bag tracking technology is already in use with several Lufthansa Group carriers, China Southern, and KLM. According to Alaska, the tags are connected to individual airline mobile applications and can be activated up to 24 hours prior to flight departure.

Each tag features an embedded antenna and does not require recharging, according to BagTag’s website, which prices its “Fix” version of the tag at €57,81.

Charu Jain, senior vice president of merchandising and innovation for Alaska Airlines, commenting on the new program, said that the technology will allow the airline’s passengers to “to tag their own bags in just seconds and makes the entire check-in process almost all off-airport.”

Introduction of the new bag tag technology comes several months after Alaska opened a technology incubator hub in San Jose, California. The research hub has been tasked with developing new approaches to digitally transforming the air travel experience with a focus on airports. San Jose International is also the launch airport for the rollout of the new technology.

“Alaska Airlines is the first U.S. airline to pioneer this innovative electronic bag tag program here at SJC,” said San José Mayor Sam Liccardo. “This program will modernize the check-in process and provide a more sustainable option for travelers.”  

Alaska plans on rolling the new bag tags out in two phases; starting later this year, they will be distributed to 2,500 of their frequent fliers. Starting in early 2023, the electronic bag tags will then become available for purchase to Alaska’s Mileage Plan members.

Qatar Airways to Equip 777X Fleet with Astrova IFE System

Qatar Airways will equip its fleet of Boeing 777X aircraft with the Astrova in-flight entertainment (IFE) system supplied by Panasonic Avionics, according to an announcement made by the two companies during the 2022 Aircraft Interiors Expo (AIX) in Germany.

Under the agreement, all 40 of the 777X jets on order for Qatar will feature the Astrova 4K OLED seatback system, including 13-inch screens in economy and 22-inch screens in business class. The 777X fleet operated by Qatar will be the first aircraft type to feature Panasonic’s new Astrova IFE technology.

Qatar Airways Group CEO Al Baker commented on the IFE selection for the 777X fleet, describing it as “cinema-grade, 4K OLED clarity that will captivate them when watching our latest blockbusters using Oryx One IFE system.”

AIX was also the first public announcement of the new Astrova system from Panasonic, which describes the technology as being capable of providing more personalization and immersion into the seatback IFE experience for individual airlines and their passengers. Some of the unique features of Astrova include a dedicated 67W USB-C port, removable peripheral bar, and access to passengers’ personal subscription services and content such as Apple Music, Spotify, Netflix, Disney+, YouTube, and HBO Max.

Qatar Airways is the launch customer of the 777X, which Boeing now expects to be ready for entry-into-service by 2025.

Lufthansa Launches FlyNet App to Make In-Flight Internet Purchasing Easier

Lufthansa has rolled out a new smartphone application developed by Deutsche Telekom called “FlyNet” designed to make the purchasing and use of in-flight internet on short- and long-haul flights a three-step process for passengers.

FlyNet is accessed by passengers on their Android or iOS devices and allows them to purchase Lufthansa’s in-flight Internet packages “at any time before or during the flight,” according to a June 28 announcement of the rollout. The German telecommunications provider is also allowing logins to the app through Lufthansa’s “Miles and More” frequent flyer program.

A key aspect of FlyNet highlighted by Deutsche Telekom is how it allows passengers to purchase an in-flight internet access package prior to boarding.

“Most airline passengers find the use of Wi-Fi on board still complicated, that’s why we made it our goal to simplify the experience from the ground up. In-flight connectivity should work like the internet at home, be easily accessible and create additional value for passengers,” Rolf Nafziger, Senior Vice President of Deutsche Telekom Global Carrier, said in a statement commenting on Lufthansa’s rollout of FlyNet.

FlyNet’s introduction for Lufthansa comes amid a period of increased airline passenger demand for the German carrier, which recently responded to a surge in passenger demand by announcing a decision to reactivate some of the A380 aircraft it placed in storage in Spain and France during the pandemic. The first A380s are scheduled to return to service for Lufthansa beginning next summer, and the airline has some 50 new Airbus A350, Boeing 787, and Boeing 777-9 long-haul aircraft and more than 60 new Airbus A320/321s on order within the next three years.

Lufthansa is making FlyNet available currently “on an ever increasing number of flights within Europe and to and from North Africa and the Middle East,” according to its website.

“We are very pleased to offer the new Lufthansa FlyNet App to our passengers. Internet on board is a great service,” Oliver Schmitt, Senior Vice President Loyalty & Ancillary Services for Lufthansa Group, said in a statement. “The Lufthansa FlyNet App will make internet access even easier, attract customers to our FlyNet portal and it will therefore improve their travel experience.”