Last week, Air France was the latest major airline to announce that it would be moving its in-flight Wi-Fi to the Starlink network, offering it free to members of its frequent flyer program.
Starlink outbid a group of GEO suppliers, including Anuvu, Intelsat, Panasonic Avionics, and Orange Business, across a fleet of more than 200 aircraft. The announcement comes a few weeks after United Airlines also revealed that it will be moving its in-flight connectivity service to Starlink on 2,500 flights.
Hippopotamus dinner
With Starlink’s robust network of 6,000-plus laser-linked satellites beaming down 200-350 Mbps for in-flight connectivity—compared to about 20 Mbps from GEO providers—Starlink has begun to land large-scale aviation contracts, style -Hungry Hungry Hippos.
And a plus for consumers everywhere: Airlines are moving in droves to offer their Wi-Fi for free.
200 Mbps Wi-Fi provided with free sounds is very nice for me. What’s in it for the airlines? Will Starlink sweep? What happened to GEOs?
Why bless us all with free Wi-Fi?
JetBlue became the first airline to announce free Wi-Fi in 2017. Six years later, Delta followed suit. The domino effect is growing stronger, as United Airlines, Air France, Hawaiian Airlines, and Qatar Airlines recently announced free service as well.
When you are free. . .
Marques Brownlee, one of the biggest tech reviewers in the world, often emphasizes his first rule of making money online: If a product is offered for free, it is very difficult to get consumers to pay for it again. Sadly he fell victim to his own rule when he released a paid iPhone wallpaper app last week and was ridiculed by the internet, which hates paying for anything.
Airline seating is unique because it’s a closed market, depending on the prices and offerings of the airline. But companies that decide to ignore the free movement of Wi-Fi risk the same kind of consumer fury that Brownlee faced.
Free and fast in-flight communication (IFC) is hitting the mark, and consumers will soon start to expect it.
Airlines are also winning
Free Wi-Fi is an easy choice for businesses and airlines. Long plane rides are fun. They are boring and usually end up with angry customers. The best way for airlines to calm passengers down from a harrowing experience is to stick an iPad in front of them and make them lose themselves in an online breastfeeding session.
The fastest plane ever
Hawaiian Airlines provides a good example. It recently began offering the Starlink service on its fleet of 42 Airbus aircraft. The company reports that customers often get download speeds of 200-plus Mbps without capacity issues.
“We hear ‘the plane went so fast’ or ‘my kids were happy and could play the game they play at home,'” IFEC director Evan Nomura told Payload.
All roads lead to freedom
In addition to free Wi-Fi trends from other airlines and a more pleasant customer experience, Nomura also points to SpaceX’s standards as a reason to provide a more comfortable service. “When we signed up with Starlink, that’s the only thing they gave us for free.”
But in the airline business, nothing is ever truly free.
- Airlines have an average profit margin of only 2.6% or $5.44 per passenger per trip.
- Airlines protect those slim margins as their economy depends on them.
The revenue lost by not making customers pay for Wi-FI and Starlink’s estimated $25,000 per month cost of the service will likely end up being reflected in ticket prices. Although the price of the pass may be small, the benefits of high-speed Internet are a win-win for all parties.
Starlink will sweep?
Hawaiian Airlines had a unique problem before it announced that it would add Starlink to most of its fleet: The company could not provideanywherein-flight connectivity since most of its flights are over the Pacific—a notoriously difficult region for satellites to enter due to a lack of terminal space and low local demand.
Hawaiian Airlines says there was an RFP process for the IFC contract, but Starlink and laser link satellites were the only ones that could really solve the problem.
“We didn’t want to buy a system that would expire soon. And the thing about Starlink is that they have assured us that they will always invest in their network,” Nomura said.
Change costs
Refurbishing the fleet to support Starlink terminals is expensive and has contributed to slow adoption among airlines. Starlink charges $150,000 for terminal installation per flight. The company is working to reduce installation time to less than one day.
As airlines are always looking to consolidate to attract a more valuable customer, Delta (currently using Viasat, Intelsat, and Hughesnet) and American Airlines (currently using Viasat, Intelsat, and Panasonic) are likely looking to use Starlink. .
Starlink is growing and growing
SpaceX announced last week that its Starlink user base has grown to 4M customers, adding an amazing 1 million users in the past four months (thanks, Starlink Mini).
Growth has come mainly from the consumer market, but aviation represents a growing, albeit limited, market. There are less than 10,000 commercial airlines in the US and less than 30,000 worldwide.
The company is looking to grow further by acquiring business aviation contracts, hoping to become an automatic service offered by all airlines.
Enters GEO providers
GEO’s in-flight communications providers find themselves on the defensive, trying to protect their existing relationships and stop the bleeding.
This week, Gogo announced that it will buy rival Satcom Direct for more than $600 million to fend off Starlink’s impending threat to the business aviation market.
Viasat—another key IFC supplier—has seen its stock drop nearly 90% since SpaceX launched its first operational satellites in May 2019.
Other LEO providers, such as OneWeb and the soon-to-be-implemented Amazon Kuiper service, can provide information similar to home Wi-Fi. Innovative solutions such as the GEO micro-birds developed by Astranis are also finding new ways to improve IFC. However, given the high switching costs and the very fast and high-quality connections offered by Starlink, the service is starting to settle into our in-flight experience.
This story appeared firstPaymentand is republished here with permission.
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