Reconnecting the skies: the return of inflight broadband: two years after Connexion By Boeing bit the dust, inflight broadband is poised to stage a comeback. Inmarsat is leading the way in the L-band space, but Intelsat aims to bring Ku-band back in the game. Just one thing: will it ever be profitable?

Telecom Asia, June, 2008 by John C. Tanner

According to the same report, which breaks down the business cases by technology--OnAir (Inmarsat-based), Aircell (terrestrial-based) and Row44 (VSAT-based)--OnAir was deemed unlikely to succeed unless it can hit revenues above $150,000 per plane per year, while Aircell would need to equip at least 1,000 planes by 2013 to break even.

"Row44's approach has a relatively limited downside and achieves breakeven most easily of all the three providers in a downside scenario, with 600 planes and end-user revenues of $120,000 per plane per year," Farrar says in the report.

TMF concludes that inflight internet access services will generate $189 million in end-user revenues from 1,400 planes by 2013. That breaks down to $135,000 per plane.

NSR's Rousseau is more upbeat, citing both the industry's widened approach and the fact that demand for inflight connectivity hasn't died down. "One of the first things people asked airlines when CbB shut down was, when will you put it back?" he says.

Even more encouraging is the fact that airlines still want it at all, considering not just the bad CbB experience, but also the growing pressure to cut costs in the face of escalating oil prices.

Bruner agrees, crediting the lower cost of equipment and the flexibility of service choices. "The FAA alone has already received 42 applications to install the systems on new aircraft," he says, adding that the current US economic downturn "is not likely to deter the market to a major extent and the market will continue to grow steadily for the next five years."

As for the inflight broadband business model, Rousseau says airlines still have the same basic options they had before--either pay-as-you-go or complimentary. "The only thing we know for sure is you can't charge what CbB did," he says.