In-flight connectivity is expected to become the largest global aviation segment for mobile satellite communications in the future with cabin and passenger experience as key areas. New revenues, cutting turn times and keeping digital natives happy will be some of the goals for the players in this market.
We’ve come a long way from the early days of on-board Wi-Fi. Broadband satellite networks provide oceanic as well as terrestrial coverage. But that was just the first step. As part of the push for passenger loyalty and revenues, some airlines are eyeing branded, personalized connectivity services as well as basic Internet access.
The cabin itself is becoming a focus for upgrading the passenger experience. Boeing and Airbus – along with teams of suppliers – are developing seats, galleys, and other components that will feed status data and other information into a wireless network to improve service and reduce turn times.
When these efforts will reach critical mass is an open question. But the trend is unmistakable, driven by the prospect of new revenues, reduced maintenance cost, and the need to meet the expectations of the digital natives who eventually will make up the mass of the flying public. Key questions are how widespread cabin connectivity and Internet passenger services are today and how fast and how challenging revenue growth will be.
Fleet Equipage
At the end of 2018 about 30 percent of the worldwide commercial fleet was equipped with broadband Internet Wi-Fi, estimates Alexis Hickox, head of commercial aviation network services marketing with Collins Aerospace. She expects this to grow to around 70 percent by 2023. Further out, an Inmarsat/London School of Economics (LSE) study estimates that by 2035 inflight connectivity will be ubiquitous worldwide. Collins’ commercial connectivity platform, CabinConnect, has about four airlines flying and a couple more contracted, she says. Norwegian, for example, went live in December 2018.
In-flight connectivity is expected to become the largest global aviation segment for mobile satellite communications in the future, says Amanda King, vice president and general manager of connected hardware, for Honeywell Connected Enterprise, Aerospace. She predicts that around 23,000 commercial aircraft will be connected by 2027, up from 7,400 in 2017.
Honeywell’s JetWave is “the exclusive hardware that enables air transport, regional, and business aviation aircraft to connect to Inmarsat’s Global Xpress Ka-band service – GX Aviation,” which can provide “speeds up to 50 Mbps,” she says.
Within the next five to 10 years, approximately 65 percent of all commercially operated aircraft will be connected using a “broadband pipeline,” via Ka-Band or Ku-Band, estimates Lukas Bucher, head of product connectivity for Lufthansa Technik (LHT). Additionally, there will be two or three air-to-ground networks available in the U.S. and Europe, he says, and maybe in China and India at a later date.
The Inmarsat Ka-band satellites provide a “seamless global service,” Hickox says. “They own the whole network, so there are no dropouts.” On GX the beams basically overlap, so “there’s more capacity and bandwidth on congested air routes.” Ku-band satellites, by contrast, use a “patchwork quilt of satellite networks.”
Inmarsat Aviation expects high-quality onboard Wi-Fi to be ubiquitous worldwide within the next five years, says Dominic Walters, vice president marketing communications and strategy. “Once this saturation point is reached, simply offering Wi-Fi to passengers will no longer be a point of differentiation for airlines.” That’s when the focus will quickly shift towards differentiation via innovative passenger services, such as serving targeted offers via e-commerce portals, based on passenger preferences and past purchasing behavior.
Honeywell and Collins
Honeywell and Collins are value-added resellers for Inmarsat’s GX Aviation service. Honeywell’s Inmarsat agreement, announced in November 2018, marked Honeywell’s entry into the airline cabin services market, allowing it to market connectivity services, as well as JetWave hardware, directly to airline customers. These services, known as GoDirect in the bizav market, were rebranded in June with the launch of Honeywell Forge for Airlines. This software includes solutions for flight operations, flight efficiency, and connected maintenance in a single user interface.
Honeywell Forge for Airlines focuses on increasing airline profitability and efficiency. Passenger entertainment applications enabled by the GX broadband satellites would be offered by airline partners. Honeywell’s new airline services provide advanced analytics for improved maintenance, repair, and overhaul and less airplane downtime, King says. Performance data can be gathered in real time via JetWave or while the aircraft is on the ground.
Honeywell Forge for Airlines offers “actionable analytics and insights” that airlines can use to lower costs and improve the passenger experience, King says, providing operators a comprehensive look at fleet and environment data. The company has added Nippon Cargo Airlines and Kuwait Airways to its list of more than 32 global customers already using Honeywell Forge Flight Efficiency, including carriers such as Lufthansa, Etihad, Finnair, Japan Airlines, and Turkish Airlines.
Collins
Collins also offers “services over and above pure airtime,” including both efficiency and entertainment features, Hickox says. CabinConnect includes a portal for airline operations and management.
“We customize the airtime packages we have with Inmarsat to address the airline needs,” with passenger Internet access options ranging from basic messaging to streaming/premium services via Collins’ software and network management systems. CabinConnect supports applications such as onboard retail management, crew functions, advertising and sponsorship, audio/video on demand, news and weather, destination information, and moving map.
But airline return on investment is unlikely to come from passenger connectivity revenues alone, she advises. “We really encourage our airlines, as much as they can, to leverage that broadband pipe across the rest of the aircraft, to use it for the [cabin] crew, and for as many applications as you can support,” including the operational side of the business.
Collins also has an “intelligent router that can take non-safety-related cockpit data, like weather, and “maybe route that data through to the broadband link in the back rather than the more expensive link in the front.”
Predictive maintenance is an example. “I’m talking about the ability to take information from sensors that may be attached to any part of the aircraft,” Hickox explains. This way the crew can determine whether something is faulty and file real-time tech log and maintenance log reports in flight that could reduce turnaround times on the ground. Collins is working with a number of airlines on that type of business model. It also offers applications such as fuel consumption to improve airline operational efficiency.
“The top [passenger] application is social media,” Hickox says. This includes messaging via apps like Snapchat, Twitter, WhatsApp, and Instagram. Collins also offers premium packages where passengers can stream data from Instagram or YouTube or Netflix.
Advertising and sponsorship features allow airline partners to pay for packages so the carriers can provide them for free or perhaps for watching a short video, she says. That’s one way to monetize connectivity.
A payment gateway is also an integral part of the offering, she says. “Obviously if we’re providing Internet packages, we have to be able to charge for those.”
CabinConnect can be integrated with an airline’s ticketing system, so it would be possible for a passenger to choose an Internet package at that time but still upgrade onboard. If it’s integrated with the frequent flier database, an airline could identify premium customers in their loyalty program and offer them free or discounted service at the time of booking.
What airlines offer depends on the way they want to get passengers to use the service, Hickox says. For example, they could offer free basic service but have you pay for premium. Collins has tools that can manage packages by time, data, or activity.
A passenger can download a GUI from the server to any personal device to watch movies or access the Internet from phones, iPads, or laptops. The passenger portal has a tile-based interface, so you can click on the Internet tile and then choose a package. “We provide the pipe – the airline then decides how they want to package that pipe,” Hickox says.
There are typically three tiers – messaging, social, and streaming. There is content – like free movies – on the server, but the server is also the access point for the Internet.
Intelligent Cabin
Airbus is flight testing its “Airspace Connected Experience,” platform, which collects data from cabin components such as seats and galleys to improve the passenger experience, increase airline revenues, and boost efficiency. Future benefits could include booking of bin space, setting seat positions, and customizing inflight IFE offers, the company says.
Boeing and its partners are working on a similar project and plan to test technologies this year as part of Boeing’s ecoDemonstrator program. An i+sCabin (intelligent and smart cabin) consortium, launched in 2018, is laying the groundwork with an onboard network standard. A key goal is to enable “the collection and exchange of information to generate a real-time status for all aircraft cabin areas, which can be particularly valuable in predicting potential faults,” explains Jeff Roberts, senior manager for product strategy and future airplane development with Boeing Commercial Airplanes (BCA). A networked system would enhance passenger experience and optimize airline maintenance cycles and cabin operations.
Implementation and testing of the first version of the cabin communication standard is expected towards the end of 2019 and in the course of 2020, with completion in 2021, he says. Partner competencies range from seat actuation to cabin management systems, from cabin interior hardware and connectivity to aircraft operations and integration.
The consortium plans to work through ARINC’s Cabin Systems Subcommittee to develop an interface standard for connecting cabin equipment to an intelligent cabin network, Roberts says. A Cabin Secure Media Independent Messaging ad-hoc group was formally chartered in the last few weeks. While the standard will leverage commercial network standards as much as possible, there may be unique aspects such as specific messaging, network configuration, and security to support unique aviation requirements, he says. Among the tasks will be the selection of standard protocols, development of standard application-layer messaging, a mechanism for commissioning/joining devices to the network, software data-loading methods, and network security mechanisms.
“The airlines have expressed their challenges with managing faults in the cabins, or some catering needs, etc.,” says John Craig, chief engineer, cabin and network systems and aviation security with BCA. “So we are figuring out how to standardize these interfaces” and message formats to get the data off the airplane and into the airline’s back office — data like the status of the coffee maker in the galley, seat issues, and food and beverage status.
Roberts cites the example of Etihad, which sends a team of mechanics to an airplane at the gate “to manually test everything inside the cabin to make sure it’s working properly.” But they would prefer for the airplane to check everything and tell them it’s fine – “they want the cabin to take care of itself.”
Technology like smart seats exists today, but it needs to be able to communicate and be customized to particular airline needs. Some airlines might not want to inform the cabin crew about a seat malfunction, he says. They’d rather receive data aggregated on a weekly basis. What’s needed is the network and software to receive the data and aggregate it.
Cabin Connectivity Market: Phenom or Phantom?
Estimates of this emerging market vary widely but give an idea of the possibilities. Oliver Wyman estimates that cabin connectivity upgrades in 2018 amounted to 40 percent of the 1-billion-euro upgrade and retrofit market for IFE, according to Archag Touloumian, Oliver Wyman principal. By 2025 he expects the cabin connectivity upgrade market to double in size, reaching up to 800 million euros.
But airlines’ capacity to develop the cabin connectivity market will depend on their ability to offer it to their passengers for “acceptable” prices, says Jerome Bouchard, Oliver Wyman partner. That means finding a way to reduce connectivity costs for all the players in the value chain.
Lufthansa Technik sees its addressable market, 2019-2026 — from initial installation (retrofit) and upgrades — as $8.6 billion, including engineering and certification, hardware, and touch labor.
LHT also notes some findings from a 2019 Euroconsult report:
- At year-end 2018 over 8,200 aircraft were equipped with in-flight connectivity. This number is forecasted to increase to around 20,500 by 2028.
- At year-end 2018 almost 110 airlines provided in-flight connectivity.
- At year-end 2018 more than 6,300 commercial aircraft had satellite connectivity while around 1,800 had air-to-ground connectivity.
The London School of Economics (LSE), in partnership with Inmarsat, forecasts that broadband-enabled ancillary revenues for airlines will reach $30 billion by 2035. All told, inflight broadband has the potential to create a $130-billion global market within the next 20 years, says Dominic Walters, vice president of marketing communications and strategy with Inmarsat Aviation, citing the study.
Wi-Fi-enabled revenues would be generated through such means as premium content, broadband access fees, e-commerce, advertising, and sponsorship, Walters says. Airlines with a “retail mindset” will be able to “reap the rewards of these previously untapped revenue streams.”
There’s also an opportunity for IFE providers to drive revenues, with commoditized screens and subscription-based offers, says Oliver Wyman’s Bouchard. “SaaS [software as a service] is a very attractive business model, as passengers are captive customers during their flight.” An IFE manufacturer, for example, could propose an “aircraft cloud service” and get royalties from the software/apps business hosted in the aircraft. It could be an attractive model for the airlines, as they would be buying a service, so it would be an operational cost.
Historically, however, cabin connectivity has been a tough profit proposition for airlines. Equipage with the state-of-the-art is very expensive and current service in some cases may not be up to expectations. Even the optimistic LSE study concedes that current broadband service is “often of variable quality, with patchy coverage, slow speeds, and low data limits” and that “only around 25 percent of planes in the air [are] offering [passengers] some form of onboard broadband.”In many cases the content is stored onboard the aircraft, says Tim Kuder, senior industry analyst for commercial aerospace with Frost & Sullivan. “So I’m flying from Hawaii to LA and watching movies on my phone over Wi-Fi, but it’s just coming off of the server. It’s not connected to the Internet.”
There are also clear concerns to be addressed. “Reliability and cybersecurity must be key areas of focus,” says Oliver Wyman’s Touloumian. “Cyber-secured cabin connectivity is a growing concern, considering that passengers will be offered a set of personalized services such as in-flight online shopping.”
The Internet of Things (IoT) is critical to cabin connectivity, on the ground and in the air, Honeywell’s King explains. IoT enables real-time analytics, for one thing. “IoT and IoT devices will enable access to more data” and insights into passenger behavior, so that airlines can improve travel experiences. As an example, cabin crews could access this information in real time to see if passengers need to buckle their seatbelts. Predictive maintenance capabilities also could help eliminate costly and irritating plane delays and cancellations.
IoT eventually will become crucial, LHT’s Bucher says. Checking functions such as lighting, seat occupancy, belts, bin space, and lavatory occupancy “will only work if sensors are gathering data.”
LHT has 15 years’ experience in connectivity work. Since creating the Lconnect brand for external customers in 2015, the MRO has delivered more than 400 aircraft across more than 10 aircraft types, from the 737 to the A380. More than a dozen operators are flying aircraft with LHT installations.
The Future
One of the services that Boeing is working on is the ability for passengers to make payments from their own devices via Apple Pay, for example, says Kristin Kuhn, senior manager for strategy and market development, with BCA. A lot of times today, a passenger has to hand a credit card to a flight attendant.
Or maybe passengers could bring a cabin issue to the airline’s attention directly, she says, like crowd sourcing. Then it becomes a maintenance event that will get addressed even if the attendant is distracted, Craig adds.
Generally speaking, seamless passenger services like booking dinner and theater reservations via aircraft connectivity are not mainstream yet, Kuhn says.
What about traditional IFE? News reports indicate that some airlines are scrapping seatback IFE for wireless entertainment via personal devices in their narrow-body aircraft. But Collins’ Hickox predicts that wide-bodies will retain in-seat IFE, particularly for premium customers. “I don’t think that in-seat will ever die out entirely, but it will be a mix” of both in-seat and personal devices.
Passengers on long-haul flights also will be able to do “second screening,” using a personal device, for example, as a remote control for the onboard IFE screen.
Inmarsat currently has four GX satellites in operation and plans to triple this number by 2024, as part of a long-term strategy to develop the most agile and cost-effective constellation, Walters says. “Once the next phase of network development is complete, it will be able to immediately relocate capacity in line with flight patterns, new airline routes, and seasonal demand surges across the globe, future-proofing the ability for airline customers to invest in a consistently high quality of service.”
Inmarsat envisions applications such as fingerprint and iris scanning and transmission during flight to streamline immigration processes, reducing time spent in arrivals and boosting passenger satisfaction.
Based on known consumer behavior on the ground, any available onboard bandwidth will be used, LHT’s Bucher says. “And, most likely, it will never be enough.” However, demand eventually will lead to lower costs per Mbyte and increase the number of economically viable use cases.
But what will really move the market forward will be the ability to provide “high-speed, resilient broadband connectivity,” driven by Direct Broadcast Satellite (DBS) connectivity and 5G technologies, says Archag Touloumian, Oliver Wyman principal. 5G could replace satellite connectivity at lower altitudes and on the ground, he adds.
