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In-Flight Connectivity Revenue to Soar by 2023 —

In-Flight Entertainment (IFE) has been the norm on long-haul flights for several decades and increasingly,
in an age where permanent Internet connectivity is becoming the norm, in-flight Wi-Fi and cellular
connectivity is now becoming standard as well.

Developing communications technology, the changing nature of the airline industry and the increasing desire for passengers to stay connected at all times are driving the rollout of new services. This connectivity is drastically changing the consumer passenger experience, the business passenger experience, and the operational challenges aircraft operators face. (See Figure 1.)

Connectivity Market Segmentation

Figure 1. Connectivity Market Segmentation

A recent study from Juniper Research (https://www.juniperresearch.com/home) found that increasing adoption of in-flight entertainment and connectivity systems (IFEC) by airlines and private aircraft operators will drive annual service revenues from an estimated $3.7 billion in 2018 to over $8.4 billion by 2023. (See Figure 2.)

Total In-Flight Entertainment & Connectivity Service Revenue ($bn), Split by 8 Key Regions: $8.4 Billion

Figure 2. Total In-Flight Entertainment & Connectivity Service Revenue ($bn), Split by 8 Key Regions: $8.4 Billion

The research found that systems installation by low-cost carriers is a driving force behind this growth. In an extremely competitive environment, commercial airlines are utilizing these systems to differentiate the passenger experience.

Juniper foresees that the greater cost efficiency of these systems, compared with seatback systems, will enable the increased low-cost carrier deployment. Offering entertainment services in the budget segment removes a crucial differentiator for more traditional airlines, meaning that these airlines need to innovate in order to maintain success. Juniper recommended that one area in which they can do this is to offer free, high-quality passenger Wi-Fi.

With connectivity becoming a standard aircraft feature, Juniper predicted that the number of connected aircraft will grow by 118% between 2018 and 2023, with over 34,000 commercial and business aircraft outfitted by 2023.

Connectivity Types
There are 3 main methods for providing connectivity:
• Air to Ground (ATG) Networks
• Satellite
• Hybrid Systems

As the clamor for improved passenger experiences with in-flight Wi-Fi continues to grow apace, further technological developments are being actively researched to boost service availability and quality whilst reducing cost. Two newer developments include:

1. Additional Band Satellites: In satellite communications, generally speaking, the higher the frequency the more throughput that can be delivered. This is why bands such as Ka and Ku have become popular, which has led to companies exploring the possibility of moves further into the frequency range. Of particular interest are the Q & V bands, which theoretically can offer much higher speeds and reduced antenna size. There are, however, challenges with this approach. A frequent problem with satellite communications is rain fade. This is where satellite signals degrade by passing through rain and clouds. This problem deteriorates when the frequency is increased; however there are techniques that can be applied to avoid these issues. V band services in particular are being explored in conjunction with the next future development, LEO (Low Earth Orbit) satellites.

Example of Low Earth Orbit Coverage

Figure 3. Example of Low Earth Orbit Coverage

2. LEO (Low Earth Orbit) Satellites: LEOs, are an approach to connectivity which is fundamentally different from traditional satellite communications. Instead of orbiting at a height of around 22,236 miles (35,785km) above the earth, LEOs orbit at around 1,200 miles (1,932km). This means that they offer a far lower latency than other satellite services, as well as increased speeds. It does however mean that the satellite will cover a far smaller area, which means that a massively increased number of satellites is required. (See Figure 3.)

Several vendors have announced plans to launch LEO constellations to provide Internet services. These include SpaceX, which has committed to launching 12,000 satellites in a constellation of LEOs covering the globe, with the service called Starlink. OneWeb is another vendor planning mass deployment, with the first launch planned in Q4 2018.

VR and Operational Improvements
Virtual Reality (VR) is an additional area which is likely to have an impact on in-flight entertainment. For many travelers, flying is an uncomfortable experience. Statistics show that 12.6% of all Americans are afraid to fly. There is potential for VR to improve this experience; by immersing the passenger in VR, this fear can be ameliorated to an extent.

However, there are still serious questions about how viable an in-flight VR experience is. VR use by passengers would likely lead to disruption to other passengers unless the content is very carefully curated.

Improved aircraft connectivity will also be leveraged to gain service efficiency owing to predictive, more efficient maintenance, with Internet of Things (IoT) sensors utilized to reduce manual maintenance tasks and improve aircraft safety; allowing improved margins for airlines.

Operational use cases and the significance of the IoT is driving innovation in the satellite sector. Increased demand can be used by satellite operators to justify high capital expenditure required to build new systems, such as High Throughput Satellites (HTS) and S band services.

For more insights, download the free whitepaper “Which 3 Innovations will Transform Your In-flight Entertainment Experience?” published June 2018 by Juniper Research. For more information, please visit https://www.juniperresearch.com/document-library/white-papers/which-3-innovations-will-transform-your-in-flight.

For more information about the new In-Flight Entertainment & Connectivity research, also by Nick Maynard, please visit https://www.juniperresearch.com/researchstore/telco-service-providers/in-flight-entertainment-connectivity/technologies-business-models-and-key-vendors.

 

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