May 4, 2017 

According to Euroconsult's newly released report, Prospects for In-Flight Entertainment & Connectivity, over 17,000 commercial aircraft will offer connectivity to their passengers by 2021, up from 6,500 aircraft in 2016.

"In January 2017, over 80 airlines had either installed or committed to install in-flight connectivity (IFC) solutions," said Pacôme Revillon, CEO of Euroconsult. "This is a dozen more than last year. And while the recent U.S. and U.K. bans of personal electronic devices on certain flights might impact IFEC dynamics if extended, we believe that aero connectivity is poised for structural growth."

Our research confirms that installations will accelerate, and innovation will largely improve the in-flight experience. New generation satellite systems (globally) and air-to-ground networks (in the U.S. and Europe) will dramatically increase available bandwidth. Industry leaders such as Inmarsat, Gogo, Intelsat, SES, ViaSat and new entrants such as SmartSky Networks invest in or have started to deploy networks offering up to hundreds of Gbps. IFC hardware, from receiving antennas to modems and in-cabin solutions, is also evolving rapidly. Honeywell, ThinKom, Gilat and Zodiac Data Systems for example introduced new antenna solutions in recent months.

"In the current take-up phase, we observe a diversity in pricing models applied by airlines to passengers, from free access to a premium applied by the hour, by flight or on a monthly basis," added Mr. Revillon. "For airline connectivity suppliers, we estimate that revenues from IFC topped $1 billion in 2016 and should reach $6.5 billion by 2026."

The increase in connected aircraft and in bandwidth consumption per passenger will support growth. To that respect, the ability to support video streaming on a large scale shall be a game changer. The revenue per aircraft per year shall double in the next five years to nearly $300,000 for connectivity suppliers. Still, the need to improve profit margins, and to benefit from economies of scale, shall favor vertical integration and consolidation in the IFC value chain. Competition will be strong between leading suppliers and new entrants, with our research benchmarking the positioning of main market players including Panasonic Avionics, Gogo, Thales InFlyt, Global Eagle, Inmarsat and ViaSat.

Beyond cabin connectivity, the next ten years will see the full emergence of the smartplane concept. The future connected aircraft shall support big data strategies through multiple networks. Beyond passenger services, this will open new opportunities to optimize flight operations, aviation safety and contribute to the design of future aircraft. Our research assesses the first signs and initiatives preparing for this major transformation in the aero sector.