Qantas is no stranger to the in-flight connectivity market. The carrier installed hardware on its long-haul fleet in 2012 and kept the kit installed for nine months before removing it, calling the trial a failure. At the time the carrier suggested the take rate was less than 5 percent over the trial period. But several years have passed and the carrier is taking another shot at service, focusing on its domestic fleet rather than the long-haul planes. It will partner with ViaSat to deliver high speed connectivity to the 737 and “domestic” A330 fleet, starting with a test 737 late this year and a full deployment beginning in early 2017.
There are several factors which differentiate this effort from the prior trial. For one thing, more people are used to being connected everywhere and all the time. Yes, the flights are shorter so brief bits of offline time could be more manageable but they are also not all overnight flights, a factor which the company believes hindered take rate on the old system. It also helps that the new system has significantly more capacity available than the OnAir kit previously fitted on the long-haul fleet. Qantas will be operating with ViaSat’s Ku/Ka-band hybrid antenna on some aircraft, allowing it to take advantage of the Ka-band coverage of Australia’s National Broadband Network Sky Muster™ satellite when flying over Australia. If aircraft leave the Ka-band coverage area (i.e. the 330s on trips to Asia) the system can revert to Ku-band coverage, a technology more widely deployed globally but generally not as fast or cheap per byte. The bulk of the equipped fleet will use a more simple Ka-only kit as they will not leave the Sky Muster coverage area, though the 737s serving New Zealand will not have connectivity on the trans-Tasman route should they keep the Ka-only kit as expected based on the announcement.
ViaSat has been a partner of nbn for several years, working with the Australian group to get the Sky Muster satellite into service. Now that it is flying (it launched in October 2015) the system will provide coverage to tens of thousands of Australians who are otherwise underserved by terrestrial connectivity options, a situation which is especially challenging in the country’s more remote regions. This significant capacity will also be allocated to aircraft, just as in the US market, providing better service to the airlines and helping to spread the costs of the service across a wider swath of commercial customers. In the US market ViaSat suggests that an airplane is equivalent to 150-200 terrestrial subscribers from a revenue perspective. While the commercial details on the Qantas arrangement were not released that would be the equivalent of 15-18,000 terrestrial users with the full domestic fleet fitted, roughly 10% of the target subscriber number.
Qantas CEO Alan Joyce indicated that the connectivity would be complimentary on board Qantas flights, similar to JetBlue‘s offering today, “As a premium carrier, delivering value for money to our customers is extremely important to us. That’s why we’ll be offering access to wi-fi for free, on top of all the other things that are included when you fly Qantas.” Should connectivity expand to the Jetstar LCC brand that would be a paid consumption model, matching the other amenities Jetstar makes available.
Some questions have been raised about the capacity of Sky Muster and the demand it will see from terrestrial users as well as those flying. It is worth noting that ViaSat coverage in the USA handles more terrestrial subscribers than nbn forecasts and also 5x the number of aircraft this deal represents. Peak-hour usage may see some contention in more densely utilized spot beams but overall the capacity should be reasonable. And getting to the saturation point where that contention happens may still be a few years away.
Beyond Sky Muster ViaSat has also talked about the ViaSat-3 constellation of satellites, set to provide a massive amount of Ka-band capacity with a global footprint. The company was waiting for an anchor tenant to arrive in the Pacific region before moving forward on the satellite which will provide coverage in that region. Perhaps this move – and the associated potential international demand – will drive that process forward.
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