A few months ago, both Boeing and Airbus indicated they raised their forecast for new aircraft deliveries in large part due to Asian orders.  It is no secret the region is set to become the biggest market for commercial passenger aircraft as GDP rises. The recent Panasonic deal to equip Xiamen Airlines for its new fleet of Boeing B787s with connectivity may give a hint as to what lies ahead for IFC in Asia: more in-flight connectivity demand for wide-body airframes.

According to the ICAO, Asia is considered to hold robust growth rates in passenger traffic despite the recent woes of the Chinese economy, with on average more than 7.4% passenger growth on commercial aircraft in the next three years.  Both Airbus and Boeing are looking much farther into the future and forecast approx. 12,800 aircraft will be purchased by Asian carriers by 2033, a total close to 40% of global new deliveries.

In its recently released Aeronautical Satcom Markets, 3^rd Edition, NSR forecasts the Asia addressable commercial aircraft market for satellite connectivity will reach more than 11,000 wide-body and narrow-body planes by the end of 2024.  This is not only new aircraft, but it is clear that by the end of the next decade, if only half of the new deliveries expected from Airbus and Boeing are made (roughly 6,400 new planes), it is a prime market to outfit with connectivity right on the production line. 

But what is more important is the majority of the recent connectivity deals in the region (like the Panasonic deal) have a strong focus on wide-body airframes: China Eastern Airlines, Garuda Indonesia, JAL, Singapore Airlines, ANA, Cebu Pacific, Philippine Airlines are set to outfit satcom services on more than 250 wide-bodies, many of them new aircraft like the one for Xiamen.  And if we look at their connectivity requirements, long-haul flights on wide-body airframes is where most of the demand will originate even if they represent a smaller number of airframes. 

According to both aircraft manufacturers, the majority of airline traffic growth in Asia is set to take place inside China, which is not optimal for the deployment of costly satellite services by airlines, compared to longer duration flights. Boeing even stated in their forecast that “approximately 65% of growth will be within China”. Airbus goes even farther stating that “nearly 80% of the Chinese population and economy is within a range of about 2,000 km”, or about 2 hours of flight, notably in the Eastern part of the country. As such, they expect domestic air travel will be 60% larger than the U.S. market today.

This large growth in numbers is certainly enticing but the flight durations are not because over the same time horizon, if we look only at China’s growth in traffic to Europe, North America, Africa and to other Asian countries, it is expected to see on average a 7% growth.  And this is the driver for the Asian IFC market, where the wide-body is king and represents the main target for satellite-based passenger connectivity.

Bottom Line

Even if the volume of narrow-body aircraft to be delivered in Asia in the next 20 years will outnumber wide-bodies by a factor of up to 3, the flight patterns in the region are impacting in-flight connectivity in a different manner. As passenger traffic grows within but also outside the region, satellite-based IFC in Asia will primarily grow from passenger demand on intercontinental flights, those where the main airframes are wide-body aircraft.  And those are in for the long-haul.