This story is produced in partnership with PaxEx.Areo - The Business of Passenger Experience
Airlines in India could be online as soon as October according to reports from the Economic Times. The latest update from the Department of Telecommunications has the licensing details “in the final stages” of development with expectation of extending those options to service providers in the next two months. From there the Law Ministry must approve the rules, expected to take another two weeks, prior to service providers being eligible to purchase the necessary licenses. Cost for those licenses is expected to be trivial, while the cost to build the infrastructure and equip the aircraft will be more significant.
Global Eagle sits most ready to benefit from an approval in the Indian air space, owing to its significant relationship with Jet Airways. The two have agreed to fit at least 150 737 NG and 737 MAX aircraft with Ku-band satellite connectivity services once it is permissible. That process will be aided by the existing infrastructure on the 737 NG fleet to provide on-board entertainment options for passengers. It is still a significant and expensive undertaking for each aircraft, but should come up well short of the 10 days and $1 million claims that the Economic Times story attributes to an executive in the field. Other carriers may face longer install times and higher costs compared to the Jet/Global Eagle positioning though most satellite-based connectivity suppliers are well below that mark for the time to install.
For its part, Global Eagle CEO Joshua Marks recently acknowledge some of the challenges related to delivering internet service on planes in India, “[W]e expect [the regulations] will require local satellite gateways, Indian specific lawful interception in coordination with local telecom authorities, and finalization of applicable taxation. We are involved in the regulatory process and we have built the necessary partnerships.” The company expects that it will have Jet Airways planes equipped with the Airconnect system within a couple months of the approvals being handed down. Global Eagle was optimistic that this could mean planes equipped before the end of 2018; it will be tight but that appears to still be possible as of right now.
The association with Jet Airways raises some additional challenges given the financial crunch the carrier currently faces. Company Directors will meet on 27 August 2018 to consider cost-cutting efforts and other necessary measures to address the massive debt it currently holds. The company reportedly held just under $50 million in cash and cash equivalents against $1.4 billion in debt according to Bloomberg data. The company also postponed release of its quarterly earnings due out at the beginning of August in order to allow auditors more time to review the data.
Global Eagle Chief Commercial Officer Per Norén downplays those challenges. He acknowledges a restructuring is likely but is also confident that the project will continue forward as planned, “We’re not very concerned. They’re going to be in business and they’re going to do well…Our conversations with them are very focused on making sure that their fleet is ready to be turned on when the regulations are there.” Global Eagle executives including Marks and Norén continue their travels to the region, both to coordinate with the airline and to meet with regulators to ensure proper positioning in the market.
Header Image: Jet Airways 737 via Flickr/CC-BY 2.0
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