In the wake of this week’s Aircraft Interiors Expo in Hamburg, it seems that airlines are paying attention to the revenue potential in the cabin.  As is pointed out here, connectivity is becoming the “new normal”.  So its with interest that we note Vueling, a Spanish LCC, is adding connectivity.  The solution comes from Telefónica and combines with Eutelsat and LiveTV (now owned by Thales).  Telefónica will integrate the LiveTV onboard technology and ViaSat satellite terminals with Eutelsat’s Air Acess service, which uses high throughput satellites. The system should generate 20MBps.  Four of the airline’s A320s are being fitted, but we expect the entire fleet will get this service.  Interestingly the solution is going right away to satellite, Ka band for now, but probably will migrate to Ku eventually.  We suspect the drive to add connectivity is driven to extract every penny from the passenger.  Got to love that ancillary revenue.  Consumers have demonstrated an inelastic demand for social media and communications.  This in turn has driven a demand for ever more capable phones and tablets.  It is not longer a question of if one upgrades a device, but when.  Therefore we see the growth in offering of in-flight WiFi as merely feeding the communications beast.  Airlines are smart to do this because they will attract revenues.  How much is another story.  In-flight WiFi has been long on promise, but there are few examples of this coming through.

Also at AIX this week, GoGo announced it now has the capability to provide passengers with 70MBps.  Using Ku-band technology, Japan Airlines will be the first to implement the technology in 2015.  As a benchmark, typical broadband speed using cable is around 28MBps.  So 70 is a really big improvement, especially on an aircraft.  Once has this system running we expect the industry to follow suit.  The airline business has lots of followers but few leaders. Kudos to JAL for making this choice.  The airline was one of the first airlines to select the Boeing Connexion service, which was eventually shut down.

There is also a lot of activity that passengers don’t see. Delta made a big announcement this week about giving their cabin crews devices.  Add to this the growing use of EFBs on the flight deck and one can see a continuous growth in demand for data traffic to and from aircraft.  Throw in e-Enablement and its case closed.  Aircraft will see growing demand for data traffic from these instances.  However one of the lessons learned from AF447 and MH370 is that the airline industry and their insurers need to know where aircraft are in real-time.  This too will add to the need to increased data traffic.  Nothing in the last paragraph speaks to ancillary revenues.  But it is likely to be the greater of the two causes (passenger communication demands and airline operational demands) to ensure aircraft have the best broadband possible.

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