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With New LCC Announcements Set to Come, Wireless IFE Remains Robust in the Face of COVID

One of the first questions we were asked once the enormity of the COVID-19 situation became apparent some seven months ago was its likely impact on the in-flight entertainment (IFE) industry. Indeed, one of the messages we received from a well-respected name in the industry back in March was that he suspected “traditional IFE would not bounce back”. At that time, it was not hard to see why. Throughout the travel continuum, there is an obvious reluctance for people to interact with touchscreens of any kind, be they installed in the seatback or situated on a kiosk in the airport check-in area. In fact, the decision has, in some cases, been taken out of the hands of passengers and airlines alike. India’s Ministry of Civil Aviation, for example, suspended the use of seatback displays as a health and safety measure to limit the spread of the virus.

Then there are the not insignificant costs associated with content acquisition and maintenance, which have already compelled financially squeezed airlines to switch off systems and in some cases, I’m sure, think twice about whether they want to install the technology in future. Additionally, seatback IFE is inextricably tied to the hugely impacted wide-body market – almost every one of these aircraft is delivered with an embedded system fitted at the factory and this has been the case for years now. To put this into perspective, a total of 76 twin-aisle aircraft (excluding freighters and so-called bizliners) were delivered by Airbus and Boeing between the start of this year and August 31st. In the same period last year, the number was 212. That’s a 64 per cent reduction in the number of aircraft that would normally make up a sizeable portion of the seatback IFE market.

Sadly, the prospects for wide-bodies in the short- to medium term don’t look all that rosy either. According to our own internal forecast, deliveries won’t return to pre-pandemic levels until around 2026. We must also consider that the attach rate for seatback IFE on narrow-bodies has been falling for a while now. There have been several recent high profile examples where carriers – particularly in North America where adoption of seatback IFE in the single aisle market has always been higher – have opted against fitting these systems on their newest aircraft. In 2019, the attach rate stood at just under 26 per cent and we expect this to fall to 13 per cent by 2030. The decline would be even more pronounced were it not for the forthcoming arrival of long range single aisle aircraft like the Airbus A321XLR (and any rival Boeing might bring out in the next few years), which will doubtless be equipped with wide-body-esque amenities.

Enter wireless IFE (W-IFE), which has exhibited remarkable growth in recent years, and which looks set to continue on this trajectory from here on in. Why? Two reasons: First, W-IFE costs a lot less than seatback IFE – an extremely important consideration in these unprecedented times. In fact, we estimate that the average cost per seat for W-IFE (both fixed and portable) was about $381 in 2019. The equivalent figure for seatback IFE was just over $6,000. And it’s getting less expensive too thanks to a frankly insane number of vendors vying for a slice of the pie and with new entrants joining the party all the time. VuLiv and GoMedia being the two most recent examples. Second, W-IFE, by its very nature, means using your own device, which is undeniably preferable to touching a screen many others have come into contact with previously. In the interests of balance, cleaning regimes have been stepped up a notch since the pandemic was declared and our expectation is that the PED will become the de-facto control device for seatback systems in future. Furthermore, hardware development has arguably reached its zenith and rapid commoditisation will ensure that the cost per seat of seatback IFE will fall hugely over the next few years. As airline balance sheets improve, its current unattractiveness will somewhat reverse.

W-IFE also provides the foundation for airlines to exit the stone age, radically transform their operations and exploit much-needed new ancillary revenue opportunities. With paper based menu cards and the in-flight magazine now a thing of the past, the “E” in “IFE” is rapidly becoming less about entertainment in the traditional sense of the word and more about maximising engagement with passengers. We need only look to Ryanair as an example. The notoriously cost-conscious LCC is set to launch a new W-IFE solution next month on 50 aircraft and a key part of the proposition is a touchless shopping experience for food, beverages and other goods and services. The platform will also support targeted and measurable advertising based initially on the passenger’s language, the origin and destination of flights and the content viewed. My spies tell me that other well-known LCCs in Europe and Asia will announce that they are launching similar solutions before the end of this year, while many airlines that have already adopted W-IFE will also enable digital buy-on-board in the very near future.

What does all this mean in numerical terms? Well, we think that 2020 will end up seeing just over 1,100 installations of W-IFE. This represents a decline of about 19 per cent year-on-year – a quite remarkable feat given the utter devastation the virus has wreaked upon the industry. In addition to those set to reveal their hands before the year is out, airlines new to the world of W-IFE that have commenced (or significantly expanded) rollouts include: Spicejet, the IAG Group and Lion Air Group. Combined, this activity will see the W-IFE installed base grow to 8,261 – up from 7,975 in 2019. The eagle-eyed amongst you will note that last year’s installed base plus this year’s expected installs does not equal the projected installed based for 2020. And that’s because there were a large number of systems deducted from the total due to aircraft retirements and de-installations. By 2030, we believe that the number of aircraft with a W-IFE system will grow to exceed 21,000.

Given the evidence before us, it would be quite easy to agree with the industry contact mentioned at the beginning of this blog and declare that seatback systems have finally entered into a terminal decline after previous reports of its death were greatly exaggerated. That is not the view we’d take, however. Airlines will increasingly move towards ensuring passengers encounter multiple transient hardware interfaces on longer journeys, each supported by cloud services and enabling a hyper-personalised lifestyle experience. The passenger PED will become the continuity and comfort display, or the companion that connects their entire journey. The IFE screen will become secondary in value and the conduit through which all manner of traditional and non-traditional content – consistent with the airlines’ brand positioning and passenger preferences – will be displayed. In short, an enabler of services. Seatback IFE is still not dead, therefore, it will just be reborn under a different guise.

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[fusion_builder_container hundred_percent="no" hundred_percent_height="no" hundred_percent_height_scroll="no" hundred_percent_height_center_content="yes" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" status="published" publish_date="" class="" id="" border_size="" border_color="" border_style="solid" margin_top="" margin_bottom="" padding_top="" padding_right="" padding_bottom="" padding_left="" gradient_start_color="" gradient_end_color="" gradient_start_position="0" gradient_end_position="100" gradient_type="linear" radial_direction="center" linear_angle="180" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" enable_mobile="no" parallax_speed="0.3" background_blend_mode="none" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" video_preview_image="" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0"][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" spacing="" center_content="no" link="" target="_self" min_height="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" hover_type="none" border_size="0" border_color="" border_style="solid" border_position="all" border_radius="" box_shadow="no" dimension_box_shadow="" box_shadow_blur="0" box_shadow_spread="0" box_shadow_color="" box_shadow_style="" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="" margin_bottom="" background_type="single" gradient_start_color="" gradient_end_color="" gradient_start_position="0" gradient_end_position="100" gradient_type="linear" radial_direction="center" linear_angle="180" background_color="" background_image="" background_image_id="" background_position="left top" background_repeat="no-repeat" background_blend_mode="none" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset="" filter_type="regular" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0" last="no"][fusion_imageframe image_id="5583|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="none" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]https://valourconsultancy.com/wp-content/uploads/2020/10/ryanair-aircraft-2-scaled-e1602592213142.jpg[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text columns="" column_min_width="" column_spacing="" rule_style="default" rule_size="" rule_color="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""] One of the first questions we were asked once the enormity of the COVID-19 situation became apparent some seven months ago was its likely impact on the in-flight entertainment (IFE) industry. Indeed, one of the messages we received from a well-respected name in the industry back in March was that he suspected “traditional IFE would not bounce back”. At that time, it was not hard to see why. Throughout the travel continuum, there is an obvious reluctance for people to interact with touchscreens of any kind, be they installed in the seatback or situated on a kiosk in the airport check-in area. In fact, the decision has, in some cases, been taken out of the hands of passengers and airlines alike. India’s Ministry of Civil Aviation, for example, suspended the use of seatback displays as a health and safety measure to limit the spread of the virus. Then there are the not insignificant costs associated with content acquisition and maintenance, which have already compelled financially squeezed airlines to switch off systems and in some cases, I’m sure, think twice about whether they want to install the technology in future. Additionally, seatback IFE is inextricably tied to the hugely impacted wide-body market – almost every one of these aircraft is delivered with an embedded system fitted at the factory and this has been the case for years now. To put this into perspective, a total of 76 twin-aisle aircraft (excluding freighters and so-called bizliners) were delivered by Airbus and Boeing between the start of this year and August 31st. In the same period last year, the number was 212. That’s a 64 per cent reduction in the number of aircraft that would normally make up a sizeable portion of the seatback IFE market. Sadly, the prospects for wide-bodies in the short- to medium term don’t look all that rosy either. According to our own internal forecast, deliveries won’t return to pre-pandemic levels until around 2026. We must also consider that the attach rate for seatback IFE on narrow-bodies has been falling for a while now. There have been several recent high profile examples where carriers – particularly in North America where adoption of seatback IFE in the single aisle market has always been higher – have opted against fitting these systems on their newest aircraft. In 2019, the attach rate stood at just under 26 per cent and we expect this to fall to 13 per cent by 2030. The decline would be even more pronounced were it not for the forthcoming arrival of long range single aisle aircraft like the Airbus A321XLR (and any rival Boeing might bring out in the next few years), which will doubtless be equipped with wide-body-esque amenities. Enter wireless IFE (W-IFE), which has exhibited remarkable growth in recent years, and which looks set to continue on this trajectory from here on in. Why? Two reasons: First, W-IFE costs a lot less than seatback IFE – an extremely important consideration in these unprecedented times. In fact, we estimate that the average cost per seat for W-IFE (both fixed and portable) was about $381 in 2019. The equivalent figure for seatback IFE was just over $6,000. And it’s getting less expensive too thanks to a frankly insane number of vendors vying for a slice of the pie and with new entrants joining the party all the time. VuLiv and GoMedia being the two most recent examples. Second, W-IFE, by its very nature, means using your own device, which is undeniably preferable to touching a screen many others have come into contact with previously. In the interests of balance, cleaning regimes have been stepped up a notch since the pandemic was declared and our expectation is that the PED will become the de-facto control device for seatback systems in future. Furthermore, hardware development has arguably reached its zenith and rapid commoditisation will ensure that the cost per seat of seatback IFE will fall hugely over the next few years. As airline balance sheets improve, its current unattractiveness will somewhat reverse. W-IFE also provides the foundation for airlines to exit the stone age, radically transform their operations and exploit much-needed new ancillary revenue opportunities. With paper based menu cards and the in-flight magazine now a thing of the past, the “E” in “IFE” is rapidly becoming less about entertainment in the traditional sense of the word and more about maximising engagement with passengers. We need only look to Ryanair as an example. The notoriously cost-conscious LCC is set to launch a new W-IFE solution next month on 50 aircraft and a key part of the proposition is a touchless shopping experience for food, beverages and other goods and services. The platform will also support targeted and measurable advertising based initially on the passenger's language, the origin and destination of flights and the content viewed. My spies tell me that other well-known LCCs in Europe and Asia will announce that they are launching similar solutions before the end of this year, while many airlines that have already adopted W-IFE will also enable digital buy-on-board in the very near future. What does all this mean in numerical terms? Well, we think that 2020 will end up seeing just over 1,100 installations of W-IFE. This represents a decline of about 19 per cent year-on-year – a quite remarkable feat given the utter devastation the virus has wreaked upon the industry. In addition to those set to reveal their hands before the year is out, airlines new to the world of W-IFE that have commenced (or significantly expanded) rollouts include: Spicejet, the IAG Group and Lion Air Group. Combined, this activity will see the W-IFE installed base grow to 8,261 – up from 7,975 in 2019. The eagle-eyed amongst you will note that last year’s installed base plus this year’s expected installs does not equal the projected installed based for 2020. And that’s because there were a large number of systems deducted from the total due to aircraft retirements and de-installations. By 2030, we believe that the number of aircraft with a W-IFE system will grow to exceed 21,000. Given the evidence before us, it would be quite easy to agree with the industry contact mentioned at the beginning of this blog and declare that seatback systems have finally entered into a terminal decline after previous reports of its death were greatly exaggerated. That is not the view we’d take, however. Airlines will increasingly move towards ensuring passengers encounter multiple transient hardware interfaces on longer journeys, each supported by cloud services and enabling a hyper-personalised lifestyle experience. The passenger PED will become the continuity and comfort display, or the companion that connects their entire journey. The IFE screen will become secondary in value and the conduit through which all manner of traditional and non-traditional content – consistent with the airlines’ brand positioning and passenger preferences – will be displayed. In short, an enabler of services. Seatback IFE is still not dead, therefore, it will just be reborn under a different guise. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

PR: Despite Pandemic, IFC Terminal Installed Base in Business Aviation to Reach 32,000 by 2029

August 13, 2020 13:00 British Summer Time (BST)

London. A new report predicts strong take-up of in-flight connectivity (IFC) systems on business aircraft over the next ten years. According to Valour Consultancy, an award-winning provider of market intelligence services, the number of IFC terminals installed on business jets will rise to almost 32,000 in 2029 – up from 20,689 at the end of 2019.

The report – “The Market for IFEC and CMS on VVIP and Business Aircraft” – predicts a sharp drop-off in installation activity in 2020 as a result of the COVID-19 pandemic but sees the market picking up more quickly than commercial aviation. “Annual installations of IFC systems on business aircraft are set to fall by 28 per cent in 2020 compared to 2019 said report author, Craig Foster. “While 2021 will be another tough year, the launch of several new solutions will provide impetus. Deployments from SmartSky Networks, Iridium (with Certus) and SES/Collins Aerospace (LuxStream) are all expected to ramp up at this point in time. Intelsat and Satcom Direct will resume new installs for the FlexExec service too” he continued.

Foster also highlights how the market could benefit from current and ongoing airline capacity reductions and people looking less favourably on travelling through crowded airports and in cramped commercial aircraft cabins. “So-called health corridors are starting to emerge as increased interest in flying privately from those who haven’t previously done so acts as a catalyst of the recovery. Many fractional providers are reporting that recent months have seen record enquiries from new customers. We also expect to see more business jets being used by corporations to transport employees beyond the C-suite to protect them from COVID-19 and recent moves to create more flexible business models will help support these added users” said Foster.

The report also takes a look at the closely-related markets for in-flight entertainment (IFE) and cabin management systems (CMS). Due to the higher costs associated with installation of these systems and private aircraft owners and operators said to be prioritising IFC when pulling back on discretionary spend, the impact of the outbreak is expected to be more profound in 2020 and 2021. “While IFE/CMS vendors have been harder hit, the adoption of wireless in-flight entertainment (W-IFE) and full CMS functionality on smaller aircraft like small cabin jets and turboprops is expected to increase, expanding the total addressable market beyond the mid- to large-cabin aircraft that have long been the staple of the market” concluded Foster.

Valour Consultancy is a provider of high-quality market intelligence. Its latest report “The Market for IFEC and CMS on VVIP and Business Aircraft – 2020 Edition is the newest addition to the firm’s highly-regarded aviation research portfolio. Developed with input from more than 30 companies across the value chain, the study includes 85 tables and charts along with extensive commentary on key market issues, technology trends and the competitive environment.

Contact: info@valourconsultancy.com

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A new report predicts strong take-up of in-flight connectivity (IFC) systems on business aircraft over the next ten years. According to Valour Consultancy, an award-winning provider of market intelligence services, the number of IFC terminals installed on business jets will rise to almost 32,000 in 2029 – up from 20,689 at the end of 2019. The report – “The Market for IFEC and CMS on VVIP and Business Aircraft” – predicts a sharp drop-off in installation activity in 2020 as a result of the COVID-19 pandemic but sees the market picking up more quickly than commercial aviation. “Annual installations of IFC systems on business aircraft are set to fall by 28 per cent in 2020 compared to 2019 said report author, Craig Foster. “While 2021 will be another tough year, the launch of several new solutions will provide impetus. Deployments from SmartSky Networks, Iridium (with Certus) and SES/Collins Aerospace (LuxStream) are all expected to ramp up at this point in time. Intelsat and Satcom Direct will resume new installs for the FlexExec service too” he continued. Foster also highlights how the market could benefit from current and ongoing airline capacity reductions and people looking less favourably on travelling through crowded airports and in cramped commercial aircraft cabins. “So-called health corridors are starting to emerge as increased interest in flying privately from those who haven’t previously done so acts as a catalyst of the recovery. Many fractional providers are reporting that recent months have seen record enquiries from new customers. We also expect to see more business jets being used by corporations to transport employees beyond the C-suite to protect them from COVID-19 and recent moves to create more flexible business models will help support these added users” said Foster. The report also takes a look at the closely-related markets for in-flight entertainment (IFE) and cabin management systems (CMS). Due to the higher costs associated with installation of these systems and private aircraft owners and operators said to be prioritising IFC when pulling back on discretionary spend, the impact of the outbreak is expected to be more profound in 2020 and 2021. “While IFE/CMS vendors have been harder hit, the adoption of wireless in-flight entertainment (W-IFE) and full CMS functionality on smaller aircraft like small cabin jets and turboprops is expected to increase, expanding the total addressable market beyond the mid- to large-cabin aircraft that have long been the staple of the market” concluded Foster. Valour Consultancy is a provider of high-quality market intelligence. Its latest report “The Market for IFEC and CMS on VVIP and Business Aircraft – 2020 Edition is the newest addition to the firm’s highly-regarded aviation research portfolio. Developed with input from more than 30 companies across the value chain, the study includes 85 tables and charts along with extensive commentary on key market issues, technology trends and the competitive environment. Contact: info@valourconsultancy.com [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

2’s Company, 28’s a Crowd: Truth and Lies in Wireless IFE

With the world and his W-IFE now seemingly involved, keeping track of developments in this market is one that becomes more difficult with every passing quarter. At last count (Q1 2019), 25 service providers had installed their respective solutions on at least one aircraft, and more are entering the fray all the time. TEAC’s new portable solution, PortaStream, launched with IBEX Airlines on April 1st, Mythopoeia is currently rolling out its streaming platform on Rossiya and Atlas Air, while Phitek’s long-delayed deployment of Cabinstream boxes on the Afrijet ATR fleet is finally underway. So there will be at least 28 active vendors when we get round to crunching the numbers for Q2 and as we’ve covered before, plenty of candidates providing infotainment solutions in other transportation markets that may also decide they want a piece of the action.

Even so, the market is what the Herfindahl-Hirschman Index (HHI) would define as “moderately concentrated” – 1,693 being the total of each companies’ squared market share. In comparison, seatback IFE, which is dominated by Panasonic Avionics and Thales, has a HHI of 4,809, which is indicative of a highly concentrated marketplace. The reason for this is that the top five vendors – Gogo, Panasonic Avionics, Global Eagle, Viasat and Thales – collectively account for just over three-quarters of all aircraft with W-IFE. Each company owes their lofty position in the market share rankings primarily to their in-flight connectivity (IFC) heritage – W-IFE shares the same on-board architecture as IFC and can be bolted onto existing installations relatively easily.

Beyond this top five lies a clutch of vendors offering W-IFE solutions with no connectivity element of their own, although several have partnered with IFC providers to combine the two services. Only five of these companies have equipped more than 100 aircraft with W-IFE; Lufthansa Systems, AirFi, Safran (Zii), Immfly and Bluebox Aviation Systems. And contrary to the incredible number of competing W-IFE studies being pumped out on a near daily basis (see exhibits A, B and C), BAE systems are not active in the market and haven’t been for some time, while Bluebox Avionics became Bluebox Aviation Systems more than two years ago. Just remember folks, not all market intelligence firms were created equal. Some of us spend hours conducting real, primary research ?

The influx of vendors certainly makes sense when you consider the apparent advantages of W-IFE – less costly systems, reduced weight/fuel burn, rapid installation (in the case of portable W-IFE), lower maintenance costs, an abundance of PEDs being brought on board, a large untapped single-aisle market, the potential to generate ancillary revenues etc. But eight years after wireless streaming first came to the fore, there are problems still to be ironed out.

Chief amongst them is the apparent frustration passengers experience when dealing with app-based DRM. Whether it be confusion that on-board Wi-Fi is not necessarily the same as Wi-Fi that opens the door to the world wide web, an inability to download an app in a disconnected environment, or issues with compatibility across different mobile operating systems, it would seem that the move away from app-based DRM can’t come soon enough. For service providers, app-based DRM is undesirable for several reasons. Not only do passengers often forget to download W-IFE applications ahead of their journey, evidence is stacking up to suggest there’s a ceiling on the number of apps they are willing to download and use. And of course, apps create additional costs every time an update to an operating system is rolled out.

Another issue is the lack of in-seat power on the majority of single-aisle aircraft – the key target market for W-IFE vendors. According to our latest study, about 20% of single-aisle seats have an in-seat power outlet, compared to about 75% of available seats on twin-aisle aircraft. With no access to on-board power, there is every chance passengers won’t use W-IFE and instead, opt to preserve precious charge for when they land. Thankfully, departmental siloes that have prevented these two amenities from being deployed at the same time are showing signs of breaking down.

The question remains whether the market can sustain nigh-on 30 different vendors. It’s one thing putting together impressive looking demo solutions inexpensively. However, ensuring these solutions satisfy Hollywood studios, demonstrating PCI compliance and getting installations done under STC are all difficult, time consuming and expensive. That’s without taking into account the difficulties in facing off against established IFE players who carry more clout when it comes to getting their solutions approved for the line-fit market and who can often draw upon expansive R&D budgets of parent companies, as well as the ability to offer truly global after sales services.

Consolidation seems inevitable and it would be foolish to assume others won’t go the way of Storebox Inflight, Ocleen TV, BAE Systems and PaxLife, all of which entered and exited the market in a relatively small space of time.

As part of our aviation portfolio, and to supplement our in-depth annual deep dive into the in-flight entertainment market, Valour Consultancy delivers a quarterly tracker designed to keep those with an interest in the area updated on W-IFE installation activity and key trends. Unlike other quarterly trackers, the W-IFE tracker is extremely rich in data with various splits including airline, product type, aircraft type, sub fleet, fitment type, geographic region, connectivity and service provider and hardware partners. Its updated with input from service providers and airlines and is a must-have resource for anyone looking for an accurate and up-to-date understanding of the market.

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With the world and his W-IFE now seemingly involved, keeping track of developments in this market is one that becomes more difficult with every passing quarter. At last count (Q1 2019), 25 service providers had installed their respective solutions on at least one aircraft, and more are entering the fray all the time. TEAC’s new portable solution, PortaStream, launched with IBEX Airlines on April 1st, Mythopoeia is currently rolling out its streaming platform on Rossiya and Atlas Air, while Phitek’s long-delayed deployment of Cabinstream boxes on the Afrijet ATR fleet is finally underway. So there will be at least 28 active vendors when we get round to crunching the numbers for Q2 and as we’ve covered before, plenty of candidates providing infotainment solutions in other transportation markets that may also decide they want a piece of the action. Even so, the market is what the Herfindahl-Hirschman Index (HHI) would define as “moderately concentrated” – 1,693 being the total of each companies’ squared market share. In comparison, seatback IFE, which is dominated by Panasonic Avionics and Thales, has a HHI of 4,809, which is indicative of a highly concentrated marketplace. The reason for this is that the top five vendors – Gogo, Panasonic Avionics, Global Eagle, Viasat and Thales – collectively account for just over three-quarters of all aircraft with W-IFE. Each company owes their lofty position in the market share rankings primarily to their in-flight connectivity (IFC) heritage – W-IFE shares the same on-board architecture as IFC and can be bolted onto existing installations relatively easily. Beyond this top five lies a clutch of vendors offering W-IFE solutions with no connectivity element of their own, although several have partnered with IFC providers to combine the two services. Only five of these companies have equipped more than 100 aircraft with W-IFE; Lufthansa Systems, AirFi, Safran (Zii), Immfly and Bluebox Aviation Systems. And contrary to the incredible number of competing W-IFE studies being pumped out on a near daily basis (see exhibits A, B and C), BAE systems are not active in the market and haven’t been for some time, while Bluebox Avionics became Bluebox Aviation Systems more than two years ago. Just remember folks, not all market intelligence firms were created equal. Some of us spend hours conducting real, primary research ? The influx of vendors certainly makes sense when you consider the apparent advantages of W-IFE – less costly systems, reduced weight/fuel burn, rapid installation (in the case of portable W-IFE), lower maintenance costs, an abundance of PEDs being brought on board, a large untapped single-aisle market, the potential to generate ancillary revenues etc. But eight years after wireless streaming first came to the fore, there are problems still to be ironed out. Chief amongst them is the apparent frustration passengers experience when dealing with app-based DRM. Whether it be confusion that on-board Wi-Fi is not necessarily the same as Wi-Fi that opens the door to the world wide web, an inability to download an app in a disconnected environment, or issues with compatibility across different mobile operating systems, it would seem that the move away from app-based DRM can’t come soon enough. For service providers, app-based DRM is undesirable for several reasons. Not only do passengers often forget to download W-IFE applications ahead of their journey, evidence is stacking up to suggest there’s a ceiling on the number of apps they are willing to download and use. And of course, apps create additional costs every time an update to an operating system is rolled out. Another issue is the lack of in-seat power on the majority of single-aisle aircraft – the key target market for W-IFE vendors. According to our latest study, about 20% of single-aisle seats have an in-seat power outlet, compared to about 75% of available seats on twin-aisle aircraft. With no access to on-board power, there is every chance passengers won’t use W-IFE and instead, opt to preserve precious charge for when they land. Thankfully, departmental siloes that have prevented these two amenities from being deployed at the same time are showing signs of breaking down. The question remains whether the market can sustain nigh-on 30 different vendors. It’s one thing putting together impressive looking demo solutions inexpensively. However, ensuring these solutions satisfy Hollywood studios, demonstrating PCI compliance and getting installations done under STC are all difficult, time consuming and expensive. That’s without taking into account the difficulties in facing off against established IFE players who carry more clout when it comes to getting their solutions approved for the line-fit market and who can often draw upon expansive R&D budgets of parent companies, as well as the ability to offer truly global after sales services. Consolidation seems inevitable and it would be foolish to assume others won’t go the way of Storebox Inflight, Ocleen TV, BAE Systems and PaxLife, all of which entered and exited the market in a relatively small space of time. As part of our aviation portfolio, and to supplement our in-depth annual deep dive into the in-flight entertainment market, Valour Consultancy delivers a quarterly tracker designed to keep those with an interest in the area updated on W-IFE installation activity and key trends. Unlike other quarterly trackers, the W-IFE tracker is extremely rich in data with various splits including airline, product type, aircraft type, sub fleet, fitment type, geographic region, connectivity and service provider and hardware partners. Its updated with input from service providers and airlines and is a must-have resource for anyone looking for an accurate and up-to-date understanding of the market.

Surge in W-IFE as Portable Boxes Gain Traction

It seems that not a day goes by without Google delivering an alert to my inbox informing me about yet another report on the wireless in-flight entertainment (W-IFE) market. Indeed, there are probably more market research companies covering the emergence of W-IFE than there are W-IFE vendors – and there are many! Unfortunately, there’s not a great deal of information out there on the rate of adoption of different types of content streaming systems (think fixed installation versus portable), how smaller airframes like turboprops are now becoming equipped in greater numbers, and of course, which companies are leading the way when it comes to market share.

I would, therefore, like to take this opportunity to pen an update on how the market has progressed since this veritable delight published in December 2017. I’ll pick up where I left off in the second section of said blog and talk in a little more depth about the portable W-IFE market and how it has grown, quite quickly, throughout 2018. Portable W-IFE, for those not familiar with the term, refers to those all-in-one server-cum-WAP units that do not require an STC as they’re stored either in overhead bins or in catering trays. Notable proponents of these boxes include AirFi, Lufthansa Systems and Bluebox Aviation Systems.

At the back end of 2017, portable W-IFE could be found on 225 aircraft – a slight increase on the 198 equipped aircraft one year prior. By looking at this minimal year-on-year rise, one could be forgiven for concluding that portable boxes would not, despite massive promise, make much of a dent in the overall W-IFE installed base. However, fast-forward to June 30th, 2018 and the prospects for portable W-IFE suddenly look a lot more promising with our stats showing the number of aircraft with portable W-IFE had shot up to 383 – a 70% increase in just six months.

Of course, we need to be mindful of the fact that the inherent portability of these boxes means that they can be installed much faster than can other categories of IFE. For this reason, airlines also move boxes on and off aircraft throughout the year and the summer travel season naturally results in a marked uptick in the use of portable W-IFE. Thomas Cook Airlines, for example, operates its AirFi boxes during the summer months and keeps them stored during winter. As such, keeping track of those aircraft operating with portable W-IFE is fast becoming a painstaking task for the diligent researchers amongst us. Nevertheless, through constant dialogue with key vendors and the airline community, we’ve been able to build and maintain an extremely granular database of those carriers that have adopted, or plan to adopt, W-IFE solutions of various kinds.

As of Q2 2018, the installed base of W-IFE stood at 6,627. That’s an increase of 344 aircraft quarter-on-quarter and the biggest three-month jump we’ve ever recorded. Over the same timeframe, the number of aircraft with portable W-IFE grew by 151, which is equivalent to 44% of all net new installations during the quarter. Some of the larger deployments that have taken place in recent months include Aegean Airlines and Aurora Airlines, which, together activated AirFi boxes on more than 50 aircraft; Virgin Australia Regional Airlines, which has gone live with Lufthansa Systems’ BoardConnect Portable product; and Air Nostrum, which commenced a fleetwide rollout of Immfly’s plug-in portable box, SkyCube.

And there’s plenty more to come. At the end of Q2 2018, the known portable W-IFE backlog (inclusive of instances where aircraft will be upgraded to “full” fixed installation W-IFE) was 364. In truth, this backlog is most probably even higher. Our figures are an aggregation of deals that have been publicly announced, or deals that we know about but cannot yet disclose. Clearly, competition in an increasingly-crowded portable W-IFE space means secrecy abounds and vendors are rightfully keeping their cards close to their chests. Even so, we already know that Caribbean Airlines and Vistara are about to begin flying with Bluebox Wow, flynas has signed on to use Inflight Dublin’s Everhub product, and Binter Canarias has joined the long list of airlines working with AirFi.

A new class of product that could result in an even greater number of aircraft with IFE is hybrid/portable W-IFE. In 2017, several vendors announced portable W-IFE boxes that can be connected to the aircraft power supply. This type of solution is likely to prove popular among operators not keen on the logistics of portable W-IFE that sees boxes removed from the aircraft at the end of the day for recharging and content refreshes. An added benefit is that there is no need for battery exchanges, which some airlines may consider a safety concern. Such solutions combine the benefits of both a portable and an installed IFE solution and could prove popular in the low-cost sector and on short- and medium-haul routes.

In addition to Air Nostrum, which, as mentioned, is deploying Immfly’s SkyCube offering, new Lufthansa Systems’ customer, Air Europa, will, in Q3 2018, roll out a version of BoardConnect Portable that sees the box stored in the overhead storage compartments of aircraft and further secured with Lufthansa Technik’s Power & Safe solution, a locked safe that is connected to a power supply to prevent unwanted access. Viasat and Tigerair Australia are about to launch something similar, while Sun Country Airlines has become the launch customer for AirFi’s aircraft-powered boxes.

Interestingly, the portable W-IFE surge has shown that there is a role for unconnected W-IFE (i.e. W-IFE with no off-board Internet connectivity) to play, despite protestations to the contrary. I, and others in the industry, have pointed out for some time that W-IFE is heavily tied to the in-flight connectivity (IFC) market. Indeed, at the end of 2017, about 80% of W-IFE-equipped aircraft also offered full off-board connectivity. However, as portable W-IFE systems tend to be comprised of one, sometimes two, self-contained units and with no satellite antennas in sight, there is a distinct lack of Internet connectivity on aircraft with such solutions. That being said, several companies are working on integrating low-bandwidth connectivity into their offerings. Lufthansa Systems, for example, plans to pair a battery-powered Iridium modem with BoardConnect Portable boxes to enable in-flight messaging and live e-commerce via the soon-to-be-complete Iridium NEXT constellation.

The emergence of portable W-IFE has also opened up an entirely new segment of the market to IFE. Its common to assume that narrow-bodies and regional jets remain the main area of focus for vendors in this space. And when we think about single-aisle aircraft, we tend to imagine Boeing 737s, Airbus A320s and the CRJs and E-Jets from Bombardier and Embraer, respectively. But turboprops comprise a not-insignificant proportion of the global fleet and despite tending to fly much shorter routes, are ripe for lightweight, inexpensive and easy-to-install solutions that can, potentially, generate additional ancillary revenues. Just last month, SpiceJet became the latest Lufthansa Systems customer to go live. The BoardConnect Portable solution (branded “SpicEngage”) is now up and running on 21 Bombardier Dash 8s. Likewise, Bluebox’s Wow solution recently started active service on five Dash 8s operated by Air Inuit.

At the end of Q2 2018, a total of 26 W-IFE vendors had installed their solutions on more than one aircraft. The new HAVELSAN/Turkish Technic joint-venture became the latest to join the party when it finally activated its W-IFE system on 44 Turkish Airlines’ aircraft in June 2018. Though not a portable solution, its entrance just goes to show how fragmented the market has become. And there’s no sign of any let-up. Global Eagle, already counted as one of the 26, expects to announce the first customers for its new portable product, AirConnect Go, by the end of the year. Amphenol Phitek, lest we forget, has signed a strategic agreement with Franco-Italian aircraft manufacturer, ATR, and plans to launch its new CabinStream portable product on Gabon-based carrier, Afrijet, in the next few months. And might we expect a new name to come from nowhere and have a crack? GoMedia, which continues to gain traction in the rail and coach markets and has just announced its first US launch on Greyhound Buses, could conceivably decide to enter the fray at any moment.

As it stands, the big IFC service providers continue to lead the way when it comes to overall share of the installed base. Gogo, Panasonic Avionics and the aforementioned Global Eagle, all occupy lofty rankings mainly because they have been able to easily add their respective solutions to existing IFC deployments that utilise the same in-cabin architecture. But the portable space is dominated by three different vendors. Together, AirFi, Lufthansa Systems and Bluebox Aviation Systems account for almost 90% of all aircraft with portable W-IFE.

Valour Consultancy is the only independent market intelligence provider tracking the W-IFE market on a quarterly basis. With installed base and quarterly activity broken out by product type, service provider, airline, fitment type, aircraft type, aircraft size and geographic region, it is a must-have resource for keeping track of developments in this increasingly dynamic market. Additionally, the product draws from our highly-complementary quarterly IFC tracker database to show which airlines have installed W-IFE alongside on-board Internet. If you’d like further information or would like us to demo either of these trackers, don’t hesitate to let us know.

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="4862|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]http://217.199.187.200/valourconsultancy.com/wp-content/uploads/2018/09/streaming-1024x683-1.jpg[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text]It seems that not a day goes by without Google delivering an alert to my inbox informing me about yet another report on the wireless in-flight entertainment (W-IFE) market. Indeed, there are probably more market research companies covering the emergence of W-IFE than there are W-IFE vendors – and there are many! Unfortunately, there’s not a great deal of information out there on the rate of adoption of different types of content streaming systems (think fixed installation versus portable), how smaller airframes like turboprops are now becoming equipped in greater numbers, and of course, which companies are leading the way when it comes to market share. I would, therefore, like to take this opportunity to pen an update on how the market has progressed since this veritable delight published in December 2017. I’ll pick up where I left off in the second section of said blog and talk in a little more depth about the portable W-IFE market and how it has grown, quite quickly, throughout 2018. Portable W-IFE, for those not familiar with the term, refers to those all-in-one server-cum-WAP units that do not require an STC as they’re stored either in overhead bins or in catering trays. Notable proponents of these boxes include AirFi, Lufthansa Systems and Bluebox Aviation Systems. At the back end of 2017, portable W-IFE could be found on 225 aircraft – a slight increase on the 198 equipped aircraft one year prior. By looking at this minimal year-on-year rise, one could be forgiven for concluding that portable boxes would not, despite massive promise, make much of a dent in the overall W-IFE installed base. However, fast-forward to June 30th, 2018 and the prospects for portable W-IFE suddenly look a lot more promising with our stats showing the number of aircraft with portable W-IFE had shot up to 383 – a 70% increase in just six months. Of course, we need to be mindful of the fact that the inherent portability of these boxes means that they can be installed much faster than can other categories of IFE. For this reason, airlines also move boxes on and off aircraft throughout the year and the summer travel season naturally results in a marked uptick in the use of portable W-IFE. Thomas Cook Airlines, for example, operates its AirFi boxes during the summer months and keeps them stored during winter. As such, keeping track of those aircraft operating with portable W-IFE is fast becoming a painstaking task for the diligent researchers amongst us. Nevertheless, through constant dialogue with key vendors and the airline community, we’ve been able to build and maintain an extremely granular database of those carriers that have adopted, or plan to adopt, W-IFE solutions of various kinds. As of Q2 2018, the installed base of W-IFE stood at 6,627. That’s an increase of 344 aircraft quarter-on-quarter and the biggest three-month jump we’ve ever recorded. Over the same timeframe, the number of aircraft with portable W-IFE grew by 151, which is equivalent to 44% of all net new installations during the quarter. Some of the larger deployments that have taken place in recent months include Aegean Airlines and Aurora Airlines, which, together activated AirFi boxes on more than 50 aircraft; Virgin Australia Regional Airlines, which has gone live with Lufthansa Systems’ BoardConnect Portable product; and Air Nostrum, which commenced a fleetwide rollout of Immfly’s plug-in portable box, SkyCube. And there’s plenty more to come. At the end of Q2 2018, the known portable W-IFE backlog (inclusive of instances where aircraft will be upgraded to “full” fixed installation W-IFE) was 364. In truth, this backlog is most probably even higher. Our figures are an aggregation of deals that have been publicly announced, or deals that we know about but cannot yet disclose. Clearly, competition in an increasingly-crowded portable W-IFE space means secrecy abounds and vendors are rightfully keeping their cards close to their chests. Even so, we already know that Caribbean Airlines and Vistara are about to begin flying with Bluebox Wow, flynas has signed on to use Inflight Dublin’s Everhub product, and Binter Canarias has joined the long list of airlines working with AirFi. A new class of product that could result in an even greater number of aircraft with IFE is hybrid/portable W-IFE. In 2017, several vendors announced portable W-IFE boxes that can be connected to the aircraft power supply. This type of solution is likely to prove popular among operators not keen on the logistics of portable W-IFE that sees boxes removed from the aircraft at the end of the day for recharging and content refreshes. An added benefit is that there is no need for battery exchanges, which some airlines may consider a safety concern. Such solutions combine the benefits of both a portable and an installed IFE solution and could prove popular in the low-cost sector and on short- and medium-haul routes. In addition to Air Nostrum, which, as mentioned, is deploying Immfly’s SkyCube offering, new Lufthansa Systems’ customer, Air Europa, will, in Q3 2018, roll out a version of BoardConnect Portable that sees the box stored in the overhead storage compartments of aircraft and further secured with Lufthansa Technik’s Power & Safe solution, a locked safe that is connected to a power supply to prevent unwanted access. Viasat and Tigerair Australia are about to launch something similar, while Sun Country Airlines has become the launch customer for AirFi's aircraft-powered boxes. Interestingly, the portable W-IFE surge has shown that there is a role for unconnected W-IFE (i.e. W-IFE with no off-board Internet connectivity) to play, despite protestations to the contrary. I, and others in the industry, have pointed out for some time that W-IFE is heavily tied to the in-flight connectivity (IFC) market. Indeed, at the end of 2017, about 80% of W-IFE-equipped aircraft also offered full off-board connectivity. However, as portable W-IFE systems tend to be comprised of one, sometimes two, self-contained units and with no satellite antennas in sight, there is a distinct lack of Internet connectivity on aircraft with such solutions. That being said, several companies are working on integrating low-bandwidth connectivity into their offerings. Lufthansa Systems, for example, plans to pair a battery-powered Iridium modem with BoardConnect Portable boxes to enable in-flight messaging and live e-commerce via the soon-to-be-complete Iridium NEXT constellation. The emergence of portable W-IFE has also opened up an entirely new segment of the market to IFE. Its common to assume that narrow-bodies and regional jets remain the main area of focus for vendors in this space. And when we think about single-aisle aircraft, we tend to imagine Boeing 737s, Airbus A320s and the CRJs and E-Jets from Bombardier and Embraer, respectively. But turboprops comprise a not-insignificant proportion of the global fleet and despite tending to fly much shorter routes, are ripe for lightweight, inexpensive and easy-to-install solutions that can, potentially, generate additional ancillary revenues. Just last month, SpiceJet became the latest Lufthansa Systems customer to go live. The BoardConnect Portable solution (branded “SpicEngage”) is now up and running on 21 Bombardier Dash 8s. Likewise, Bluebox’s Wow solution recently started active service on five Dash 8s operated by Air Inuit. At the end of Q2 2018, a total of 26 W-IFE vendors had installed their solutions on more than one aircraft. The new HAVELSAN/Turkish Technic joint-venture became the latest to join the party when it finally activated its W-IFE system on 44 Turkish Airlines’ aircraft in June 2018. Though not a portable solution, its entrance just goes to show how fragmented the market has become. And there’s no sign of any let-up. Global Eagle, already counted as one of the 26, expects to announce the first customers for its new portable product, AirConnect Go, by the end of the year. Amphenol Phitek, lest we forget, has signed a strategic agreement with Franco-Italian aircraft manufacturer, ATR, and plans to launch its new CabinStream portable product on Gabon-based carrier, Afrijet, in the next few months. And might we expect a new name to come from nowhere and have a crack? GoMedia, which continues to gain traction in the rail and coach markets and has just announced its first US launch on Greyhound Buses, could conceivably decide to enter the fray at any moment. As it stands, the big IFC service providers continue to lead the way when it comes to overall share of the installed base. Gogo, Panasonic Avionics and the aforementioned Global Eagle, all occupy lofty rankings mainly because they have been able to easily add their respective solutions to existing IFC deployments that utilise the same in-cabin architecture. But the portable space is dominated by three different vendors. Together, AirFi, Lufthansa Systems and Bluebox Aviation Systems account for almost 90% of all aircraft with portable W-IFE. Valour Consultancy is the only independent market intelligence provider tracking the W-IFE market on a quarterly basis. With installed base and quarterly activity broken out by product type, service provider, airline, fitment type, aircraft type, aircraft size and geographic region, it is a must-have resource for keeping track of developments in this increasingly dynamic market. Additionally, the product draws from our highly-complementary quarterly IFC tracker database to show which airlines have installed W-IFE alongside on-board Internet. If you’d like further information or would like us to demo either of these trackers, don’t hesitate to let us know.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Seat-back In-Flight Entertainment is NOT Dying!

It might not be a date that immediately evokes strong memories but cast your mind back, if you will, to January 25th, 2017. Donald Trump was just getting his feet under the White House desk after a shock election victory two months’ prior, Roger Federer was rolling back the years on his way to capturing a remarkable 18th grand slam at the Australian Open and, lest we forget, news outlets the world over were united in sounding the death knell for the humble seat-back in-flight entertainment (IFE) system.

And what prompted such proclamations I hear you ask? American Airlines revealed that it would be eschewing embedded IFE on new Boeing 737 MAX aircraft in favour of wireless distribution of content to passengers’ own devices. Yes, the decision by one carrier not to offer the traditional seat-back IFE on one single aircraft type sent the media into a frenzy and resulted in headlines like these:

The death of in-flight entertainment? American Airlines scraps screens and tells fliers to bring their own” – The Telegraph

American Airlines to ditch seat back entertainment” – CNBC

American Airlines does away with seat-back entertainment” – The Economist

I could certainly understand the hullaballoo if American had come to such a decision for say, the 22 A350s it currently has on order, but that fact that it chose not to fit embedded IFE on some narrow-body aircraft is hardly revolutionary. Indeed, an estimated 45% of these aircraft roll off production lines without any form of IFE on board, and around one-third of the installed base still, somewhat surprisingly, carries drop-down screens (overhead IFE). It is therefore disingenuous in the extreme to imply that the adoption of wireless IFE (W-IFE) on aircraft that often don’t carry any form of IFE whatsoever is somehow tantamount to the imminent extinction of an entire class of product.

Today, nearly every single wide-body aircraft is delivered with a seat-back system and it would be much more revealing to look at whether W-IFE is making inroads into this market to establish whether a fundamental shift is taking place. The answer is that W-IFE is making inroads, but not at the expense of embedded IFE. In fact, many carriers are installing both W-IFE alongside seat-back screens on their long-haul aircraft. One reason for this is the emergence of second screening where people commonly use their personal electronic devices (PEDs) while watching another screen – a trend most prevalent amongst millennials who are accounting for an increasingly larger percentage of travellers.

Interestingly, it is Philippine Airlines (PAL), which might provide a clue as to how the industry may shake out in the not-too-distant future. Back in 2014, the carrier drew widespread criticism and mixed reviews for choosing to jettison embedded IFE on much of its long-haul fleet. Instead, PAL fitted its A330s and A340s with SITAONAIR’s ONAIR Play W-IFE offering and was heralded as the “poster boy” for the new class of streaming systems making their way to market. Fast forward to January 23rd, 2017 – a mere two days before American Airlines made shockwaves – and PAL quietly announced the return of embedded Audio/Video On-Demand (AVOD) systems on its A330s. The reader should note that its A340s are in the process of being phased out, while ONAIR Play will still be offered on the A330s, as well as on the carrier’s short-haul aircraft.

The bottom line is that when it comes to the death of embedded IFE, we’ve heard it all before. The re-birth of IFC following the demise of Connexion by Boeing in the mid-2000s was supposed to usher in a new era of in-cabin entertainment whereby passengers could stream to their hearts’ content. While the likes of JetBlue Airways, Aeromexico and QANTAS have, in recent years, struck deals with Amazon Prime (in the case of the former) and Netflix (in the case of the latter two) that allow passengers to do just this using new high-speed connectivity pipes, all continue to maintain the latest seat-back screens.

The key reason W-IFE will not cannibalise a significant chunk of the classic IFE market in the next ten years is down to the fact that almost every single wide-body is ordered with an embedded system way in advance of actual delivery. Furthermore, major Gulf carriers have indicated that they fully intend to offer seat-back screens well into the future. Emirates, for example, will install seat-back IFE on the 150 Boeing 777X aircraft that will start to enter its fleet in 2020. As long as these luxury brands continue to offer embedded systems, other flag carriers will be compelled to do likewise in order to be seen as on the cutting edge of in-cabin technology.

Another roadblock that W-IFE vendors seeking to smash into the wide-body market need to surmount is the restriction on the streaming of early window content (EWC) to passenger PEDs. Though some vendors are keen to underplay the value of EWC, passengers have come to expect that they will be able to watch the latest Hollywood blockbusters on medium- and long-haul flights. To put this into perspective, Rodrigo Llaguno, Customer Experience Corporate Vice President at Aeromexico recently revealed that the airline had expected a higher take-up of passengers watching Netflix and was surprised when data revealed that people were actually watching more EWC. Regardless of the availability of EWC, there is an extremely long way to go before IFC technology can support streaming of web-based content to multiple seats on multiple aircraft and at a price that is palatable to passengers.

Relying on the bring your own device (BYOD) model has several other pitfalls. One is the assumption that passengers will bring onboard devices that are either fully charged, or contain sufficient charge for them to interact with the IFC/W-IFE systems for a sizeable portion of the flight. With many travellers now using their smartphones throughout their journey to store mobile boarding passes and to help them navigate through airports, as well as for general use, the need to re-charge on board is higher than ever. Unless PED battery life improves dramatically in coming years, in-seat power should almost always be installed alongside W-IFE and IFC. However, in-seat power comes with significant weight and cost penalties and weight and cost are, of course, two key considerations when carriers make the decision to ditch embedded systems in the first place.

Because most seats do not feature a method to keep PEDs upright and at a favourable viewing angle, passengers generally hold smartphones or tablets in their hands while resting their arms on the tray table. When watching a movie or television show for a long period of time, this can quickly result in neck and/or wrist ache. Additionally, the moment food and drink items arrive is the moment this valued arm rest takes on another purpose. Though a number of vendors have developed PED holders designed to overcome these issues, there is still plenty of room for innovation as pointed out by John Walton in this informative article on Runway Girl Network.

The recent electronics ban also highlighted the vulnerability of the W-IFE market to the ongoing fight against terrorism. Though it has now been partially lifted, any future return or extension of the ban (to smaller devices) would undoubtedly be extremely favourable to the future of seat-back systems.

For these reasons, it is hard to imagine seat-back IFE disappearing on long-range aircraft anytime soon. Rather than replacement technologies, W-IFE and IFC should be viewed as complimentary to embedded IFE. Entertainment can be amplified by connectivity, which can be viewed as a gateway to endless media and content options for everyone. Indeed, true personalisation of content and ads cannot be achieved without real-time connectivity off of the aircraft. Thus, it might be said that where there was once IFE, there will also now be IFC and where IFC existed on its own, there are opportunities too for IFE, whether wireless of wired.

Like PAL, Delta is another interesting test case. As well as providing IFC on many of its aircraft, it has also gone fleet-wide with the Gogo Vision-based “Delta Studio” W-IFE system. Whether passengers ultimately prefer to use this, the embedded system or a mixture of the two will offer insight into how the industry will develop.

Valour Consultancy is currently developing two new reports that delve more deeply into these trends. “The Future of In-Flight Entertainment – 2017” quantifies the market for four types of IFE system (embedded, wireless, overhead and portable) and provides forecasts for the growth of each. “The Future of In-Flight Entertainment Content – 2017” looks at how the demand for content is changing, particularly on routes where the flight time is shorter than the length of a typical movie.

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="4932|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]http://217.199.187.200/valourconsultancy.com/wp-content/uploads/2018/01/IFE.png[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text] It might not be a date that immediately evokes strong memories but cast your mind back, if you will, to January 25th, 2017. Donald Trump was just getting his feet under the White House desk after a shock election victory two months’ prior, Roger Federer was rolling back the years on his way to capturing a remarkable 18th grand slam at the Australian Open and, lest we forget, news outlets the world over were united in sounding the death knell for the humble seat-back in-flight entertainment (IFE) system. And what prompted such proclamations I hear you ask? American Airlines revealed that it would be eschewing embedded IFE on new Boeing 737 MAX aircraft in favour of wireless distribution of content to passengers’ own devices. Yes, the decision by one carrier not to offer the traditional seat-back IFE on one single aircraft type sent the media into a frenzy and resulted in headlines like these: “The death of in-flight entertainment? American Airlines scraps screens and tells fliers to bring their own” – The Telegraph “American Airlines to ditch seat back entertainment” – CNBC “American Airlines does away with seat-back entertainment” – The Economist I could certainly understand the hullaballoo if American had come to such a decision for say, the 22 A350s it currently has on order, but that fact that it chose not to fit embedded IFE on some narrow-body aircraft is hardly revolutionary. Indeed, an estimated 45% of these aircraft roll off production lines without any form of IFE on board, and around one-third of the installed base still, somewhat surprisingly, carries drop-down screens (overhead IFE). It is therefore disingenuous in the extreme to imply that the adoption of wireless IFE (W-IFE) on aircraft that often don’t carry any form of IFE whatsoever is somehow tantamount to the imminent extinction of an entire class of product. Today, nearly every single wide-body aircraft is delivered with a seat-back system and it would be much more revealing to look at whether W-IFE is making inroads into this market to establish whether a fundamental shift is taking place. The answer is that W-IFE is making inroads, but not at the expense of embedded IFE. In fact, many carriers are installing both W-IFE alongside seat-back screens on their long-haul aircraft. One reason for this is the emergence of second screening where people commonly use their personal electronic devices (PEDs) while watching another screen – a trend most prevalent amongst millennials who are accounting for an increasingly larger percentage of travellers. Interestingly, it is Philippine Airlines (PAL), which might provide a clue as to how the industry may shake out in the not-too-distant future. Back in 2014, the carrier drew widespread criticism and mixed reviews for choosing to jettison embedded IFE on much of its long-haul fleet. Instead, PAL fitted its A330s and A340s with SITAONAIR’s ONAIR Play W-IFE offering and was heralded as the “poster boy” for the new class of streaming systems making their way to market. Fast forward to January 23rd, 2017 – a mere two days before American Airlines made shockwaves – and PAL quietly announced the return of embedded Audio/Video On-Demand (AVOD) systems on its A330s. The reader should note that its A340s are in the process of being phased out, while ONAIR Play will still be offered on the A330s, as well as on the carrier’s short-haul aircraft. The bottom line is that when it comes to the death of embedded IFE, we’ve heard it all before. The re-birth of IFC following the demise of Connexion by Boeing in the mid-2000s was supposed to usher in a new era of in-cabin entertainment whereby passengers could stream to their hearts' content. While the likes of JetBlue Airways, Aeromexico and QANTAS have, in recent years, struck deals with Amazon Prime (in the case of the former) and Netflix (in the case of the latter two) that allow passengers to do just this using new high-speed connectivity pipes, all continue to maintain the latest seat-back screens. The key reason W-IFE will not cannibalise a significant chunk of the classic IFE market in the next ten years is down to the fact that almost every single wide-body is ordered with an embedded system way in advance of actual delivery. Furthermore, major Gulf carriers have indicated that they fully intend to offer seat-back screens well into the future. Emirates, for example, will install seat-back IFE on the 150 Boeing 777X aircraft that will start to enter its fleet in 2020. As long as these luxury brands continue to offer embedded systems, other flag carriers will be compelled to do likewise in order to be seen as on the cutting edge of in-cabin technology. Another roadblock that W-IFE vendors seeking to smash into the wide-body market need to surmount is the restriction on the streaming of early window content (EWC) to passenger PEDs. Though some vendors are keen to underplay the value of EWC, passengers have come to expect that they will be able to watch the latest Hollywood blockbusters on medium- and long-haul flights. To put this into perspective, Rodrigo Llaguno, Customer Experience Corporate Vice President at Aeromexico recently revealed that the airline had expected a higher take-up of passengers watching Netflix and was surprised when data revealed that people were actually watching more EWC. Regardless of the availability of EWC, there is an extremely long way to go before IFC technology can support streaming of web-based content to multiple seats on multiple aircraft and at a price that is palatable to passengers. Relying on the bring your own device (BYOD) model has several other pitfalls. One is the assumption that passengers will bring onboard devices that are either fully charged, or contain sufficient charge for them to interact with the IFC/W-IFE systems for a sizeable portion of the flight. With many travellers now using their smartphones throughout their journey to store mobile boarding passes and to help them navigate through airports, as well as for general use, the need to re-charge on board is higher than ever. Unless PED battery life improves dramatically in coming years, in-seat power should almost always be installed alongside W-IFE and IFC. However, in-seat power comes with significant weight and cost penalties and weight and cost are, of course, two key considerations when carriers make the decision to ditch embedded systems in the first place. Because most seats do not feature a method to keep PEDs upright and at a favourable viewing angle, passengers generally hold smartphones or tablets in their hands while resting their arms on the tray table. When watching a movie or television show for a long period of time, this can quickly result in neck and/or wrist ache. Additionally, the moment food and drink items arrive is the moment this valued arm rest takes on another purpose. Though a number of vendors have developed PED holders designed to overcome these issues, there is still plenty of room for innovation as pointed out by John Walton in this informative article on Runway Girl Network. The recent electronics ban also highlighted the vulnerability of the W-IFE market to the ongoing fight against terrorism. Though it has now been partially lifted, any future return or extension of the ban (to smaller devices) would undoubtedly be extremely favourable to the future of seat-back systems. For these reasons, it is hard to imagine seat-back IFE disappearing on long-range aircraft anytime soon. Rather than replacement technologies, W-IFE and IFC should be viewed as complimentary to embedded IFE. Entertainment can be amplified by connectivity, which can be viewed as a gateway to endless media and content options for everyone. Indeed, true personalisation of content and ads cannot be achieved without real-time connectivity off of the aircraft. Thus, it might be said that where there was once IFE, there will also now be IFC and where IFC existed on its own, there are opportunities too for IFE, whether wireless of wired. Like PAL, Delta is another interesting test case. As well as providing IFC on many of its aircraft, it has also gone fleet-wide with the Gogo Vision-based “Delta Studio” W-IFE system. Whether passengers ultimately prefer to use this, the embedded system or a mixture of the two will offer insight into how the industry will develop. Valour Consultancy is currently developing two new reports that delve more deeply into these trends. “The Future of In-Flight Entertainment – 2017” quantifies the market for four types of IFE system (embedded, wireless, overhead and portable) and provides forecasts for the growth of each. “The Future of In-Flight Entertainment Content – 2017” looks at how the demand for content is changing, particularly on routes where the flight time is shorter than the length of a typical movie. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Latin American Carriers Begin to Embrace In-Flight Connectivity

Having lived and worked in Peru for a couple of years, I try to take a keen interest in all things Latin America. This is especially so when it comes to researching the market for in-flight Internet and mobile phone services and breaking down our stats on connected aircraft by geography as I frequently do. As we remarked in our December 2014 blog post, adoption of in-flight connectivity in Latin America lags some way behind other regions. Back then, TAM Airlines (now known as LATAM Airlines Brasil following the merger of TAM and LAN) was the only carrier in the region to have deployed any type of IFC. The SITAONAIR-powered L-band cellular system installed on 31 Airbus A320 aircraft was, however, de-activated last year. Since that blog was written, activity in this part of the world has been hotting up with a couple of operators having now played their cards.

First up was Gol Linhas Aéreas Inteligentes (GOL). The Brazilian low-cost-carrier announced in June 2015 that it would be fitting Gogo’s 2Ku connectivity on all of its aircraft. The first – a Boeing 737-800 – was installed at the beginning of this month. The remaining 135 in the fleet (a mixture of 737-700s, and 737-800s) are due to be kitted out over the next year or so. And just this week, it has been announced that Avianca Brasil is to follow GOL’s lead and deploy Ku-band connectivity from Gogo rival, Global Eagle Entertainment (GEE).

Again, this deal is for fleet-wide equipage. The only difference being that Avianca Brasil operates fewer aircraft (Planespotters.net puts the number at 46 currently). The carrier does have a significant number of planes on order though, including 62 from the Airbus A320neo family. In its second quarter earnings call earlier this week, GEE confirmed it is in discussions to secure a contract for these new aircraft and that there also exists an opportunity to win the business of those operated by the larger Avianca entity headquartered in Colombia. Installations on Avianca Brasil’s in-service aircraft are slated to begin in the autumn.

So what of the other airlines in the region? LATAM has said that it has no plans to offer in-flight Internet in the near-term. At least not on its short-haul fleet, which has been retrofitted with the “RAVE Wireless” content streaming system from Zodiac Inflight Innovations (Zii). Whether that view changes in light of recent announcements remains to be seen. Aerolineas Argentinas and Boliviana De Aviacion have teamed up with Panasonic Avionics to install the eXW wireless in-flight entertainment (W-IFE) solution on select aircraft and may opt to add Internet capabilities at a later date. Other large carriers in Latin America, and I’m thinking of Copa Airlines and Azul Linhas Aéreas Brasileiras, in particular, have yet to reveal any sort of connectivity strategy, although some of the smaller ones have. Air Caraibes, for example, is set to install both W-IFE (from Display Interactive) and GX Aviation Ka-band connectivity from Thales on six new A350s currently on order.

Adopting IFC can be the difference between attracting an additional paying passenger and not. According to a recent survey carried out by Honeywell, almost three-quarters of passengers say they are ready to switch carriers to have access to a faster, more reliable Internet connection while airborne. Now that a couple of key players have made their moves, the proverbial dominoes can be expected to fall. Indeed, the building blocks are moving into place with satellite capacity in the region being continually expanded. According to GEE, EMC’s existing satellite contracts over South America were instrumental in securing the business of Avianca Brasil. And further high-capacity coverage is being added all the time: Intelsat 29e – the first of seven Intelsat EpicNG birds – launched in January and SES-10 is due to blast-off later in the year.

By 2025, Valour Consultancy expects there to be 846 aircraft in Central and South America with IFC. This is equivalent to a penetration rate of about 38 per cent at that point in time. Our new report, “The Future of In-Flight Connectivity” delves deeply into the IFC market, providing forecasts for connected aircraft by type of connectivity (Wi-Fi, cellular and a combination of the two), fitment type (retrofit and line-fit), aircraft type (narrow-body, wide-body, regional jet) and geographic region (Asia-Pacific, China, Western Europe, Central & Eastern Europe, Africa, Middle East, North America, Central & South America). Aeromexico, which is installing different technologies from Panasonic Avionics and Gogo, contributes to North America’s installed base as far as Valour Consultancy’s analysis is concerned.

In-Flight Connectivity in Latin America

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Having lived and worked in Peru for a couple of years, I try to take a keen interest in all things Latin America. This is especially so when it comes to researching the market for in-flight Internet and mobile phone services and breaking down our stats on connected aircraft by geography as I frequently do. As we remarked in our December 2014 blog post, adoption of in-flight connectivity in Latin America lags some way behind other regions. Back then, TAM Airlines (now known as LATAM Airlines Brasil following the merger of TAM and LAN) was the only carrier in the region to have deployed any type of IFC. The SITAONAIR-powered L-band cellular system installed on 31 Airbus A320 aircraft was, however, de-activated last year. Since that blog was written, activity in this part of the world has been hotting up with a couple of operators having now played their cards. First up was Gol Linhas Aéreas Inteligentes (GOL). The Brazilian low-cost-carrier announced in June 2015 that it would be fitting Gogo’s 2Ku connectivity on all of its aircraft. The first – a Boeing 737-800 – was installed at the beginning of this month. The remaining 135 in the fleet (a mixture of 737-700s, and 737-800s) are due to be kitted out over the next year or so. And just this week, it has been announced that Avianca Brasil is to follow GOL’s lead and deploy Ku-band connectivity from Gogo rival, Global Eagle Entertainment (GEE). Again, this deal is for fleet-wide equipage. The only difference being that Avianca Brasil operates fewer aircraft (Planespotters.net puts the number at 46 currently). The carrier does have a significant number of planes on order though, including 62 from the Airbus A320neo family. In its second quarter earnings call earlier this week, GEE confirmed it is in discussions to secure a contract for these new aircraft and that there also exists an opportunity to win the business of those operated by the larger Avianca entity headquartered in Colombia. Installations on Avianca Brasil’s in-service aircraft are slated to begin in the autumn. So what of the other airlines in the region? LATAM has said that it has no plans to offer in-flight Internet in the near-term. At least not on its short-haul fleet, which has been retrofitted with the “RAVE Wireless” content streaming system from Zodiac Inflight Innovations (Zii). Whether that view changes in light of recent announcements remains to be seen. Aerolineas Argentinas and Boliviana De Aviacion have teamed up with Panasonic Avionics to install the eXW wireless in-flight entertainment (W-IFE) solution on select aircraft and may opt to add Internet capabilities at a later date. Other large carriers in Latin America, and I’m thinking of Copa Airlines and Azul Linhas Aéreas Brasileiras, in particular, have yet to reveal any sort of connectivity strategy, although some of the smaller ones have. Air Caraibes, for example, is set to install both W-IFE (from Display Interactive) and GX Aviation Ka-band connectivity from Thales on six new A350s currently on order. Adopting IFC can be the difference between attracting an additional paying passenger and not. According to a recent survey carried out by Honeywell, almost three-quarters of passengers say they are ready to switch carriers to have access to a faster, more reliable Internet connection while airborne. Now that a couple of key players have made their moves, the proverbial dominoes can be expected to fall. Indeed, the building blocks are moving into place with satellite capacity in the region being continually expanded. According to GEE, EMC’s existing satellite contracts over South America were instrumental in securing the business of Avianca Brasil. And further high-capacity coverage is being added all the time: Intelsat 29e – the first of seven Intelsat EpicNG birds – launched in January and SES-10 is due to blast-off later in the year. By 2025, Valour Consultancy expects there to be 846 aircraft in Central and South America with IFC. This is equivalent to a penetration rate of about 38 per cent at that point in time. Our new report, “The Future of In-Flight Connectivity” delves deeply into the IFC market, providing forecasts for connected aircraft by type of connectivity (Wi-Fi, cellular and a combination of the two), fitment type (retrofit and line-fit), aircraft type (narrow-body, wide-body, regional jet) and geographic region (Asia-Pacific, China, Western Europe, Central & Eastern Europe, Africa, Middle East, North America, Central & South America). Aeromexico, which is installing different technologies from Panasonic Avionics and Gogo, contributes to North America’s installed base as far as Valour Consultancy’s analysis is concerned. In-Flight Connectivity in Latin America