NSR Report: Satcom onboard aircraft represents $32 billion revenue opportunity

NSR’s Aeronautical Satcom Markets, 5th Edition report, published tomorrow, forecasts in-flight connectivity (IFC) to be installed on 2 out of every 3 commercial passenger aircraft by the end of 2026. Driven by higher demand for broadband connectivity, this installed base will generate over $32 billion in revenue over the next decade, as air travel continues its rise around the world. The imminent start of service by highly-touted HTS will help meet the tall expectations of passengers for quality inflight connectivity (IFC) experience at the right price. “Late Millennials and Generation Z passengers comprise an increasing portion of air travelers, and they will board with their social network on hand. No longer closed during flights, airplanes will become an Internet hub, where connecting with thousands of people is necessary and normal for passengers.” states Claude Rousseau, NSR Research Director and report author. As a result, the behavior of this class of passengers will eventually drive the installation and utilization of IFC as it becomes one of the box customers tick to choose their airline.

  • To address this upcoming surge, IFC service will ramp up significantly in both quantity and quality. NSR forecasts broadband VSAT connectivity will be installed on 1 out of every 3 commercial passenger aircraft by the end of 2019.

  • With the start of GEO-HTS service, the next three years will see steep growth such that by 2021, over 50% of all the addressable commercial passenger aircraft market will have inflight connectivity served by FSS and/or HTS.

With HTS operator deals now being implemented globally, and with IFC take rates up and prices coming down, this will serve as an indicator of elasticity in a market where no entities serving connectivity are generating a profit. One potential hurdle is the ban on use of personal electronic devices (PEDs) on some lucrative routes, which will put a damper on expectations for a few years. The mid-long term impact on this potentially expanding ban is still unclear, as any prolonged or expanded ban would have severe negative impact on the IFC market.

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