United Airlines has announced it will be transitioning its entire fleet of more than 900 narrowbody and widebody aircraft to Starlink’s IFC service, with initial tests scheduled to begin in 2025. United’s fleet is currently served by a number of different providers including Viasat, Panasonic Avionics (PAC), Intelsat, and Thales. The deal is clearly a huge win for Starlink in terms of numbers, but the announcement has even deeper ramifications for the future of the IFC market.
Starlink Seizes the Day
Firstly, let’s examine what the announcement means for Starlink. Currently, the company only has around 75 commercial aircraft actively using its service (split between JSX and Hawaiian Airlines). However, Starlink had quickly built a backlog of more than 550 commercial aircraft, shared across carriers that differ in fleet size, type, location and route network, including: Qatar Airways, ZIPAIR, Air New Zealand (a trial on its domestic fleet), airBaltic, and Westjet.
The United deal, however, is on a different scale to anything Starlink had done previously, and triples the number of commercial aircraft in its backlog, taking the total number closer to 1,500. According to our tracker data, Starlink’s share of the IFC backlog has jumped to 31%, up from less than 10% just a few months ago (as can be seen in the chart below). The company now sits second in terms of total backlog behind only Viasat, and its share is expected to grow further with more deals in the pipeline.
Market Shares – IFC Backlog
Source Valour Consultancy
Repercussions for Broader Market
This deal is seismic. Winning a contract worth more than 900 aircraft is undoubtedly a sweet deal, commercially speaking, for Starlink. Infact, it may yet become the biggest single deal in the history of IFC, should United confirm the deal will encompass its regional jets. From our point of view, this is about more than just the numbers. It’s about the confidence shown in the LEO operator by United which will cause sleepless nights for Starlinks’ competitors. This is one of the world’s largest carriers, vastly experienced in IFC, stripping off proven GEO services from major providers like Viasat and PAC and equipping LEO-only Starlink hardware and services across its entire mainline fleet.
It’s worth acknowledging that the Qatar Airways deal was also a major win for Starlink’s reputation, but, like Hawaiian, the Middle Eastern carrier had long had connectivity issues caused by the location of its hub and elements of its route network. As such, it was still relying on L-band on some aircraft to ensure passengers at least had consistent coverage. United on the other hand is a carrier which operates in a part of the world densely covered with GEO capacity in Ku- and Ka-, and is prioritised by its partners because of the size of its fleet.
Some Challenges Remain
This is not to say that there aren’t still challenges remaining for Starlink. The company doesn’t yet provide global coverage, because it is still waiting on regulatory approval in many countries. This will come in time, but for now, it’s an asterisk on Starlink’s coverage map. The company is also waiting on STCs for a plethora of the most popular commercial aircraft, potentially hampering deals with airlines that want to move fast on connectivity adoption. Again, this is a challenge that Starlink will overcome in time.
One of the major arguments against Starlink was that airlines, although impressed with the quality of the service itself, may be unsure of the business model it has imposed on customers. The lack of an SLA was a concern which was voiced to Valour Consultancy by numerous airlines. There was further concern over the lack of flexibility on how they could deploy the service; Starlink insists on a free Wi-Fi business model. It also previously insisted on a portal-less experience, however Starlink seems to have mellowed on this (though United has not yet confirmed if it will be retaining a portal).
What Next for GEO Operators?
The lack of global coverage, the lack of STCs, the lack of an SLA, and the inflexibility of its business model were all the caveats which competitors in the industry have been consoling themselves with since Starlink’s emergence on the scene. This deal with United Airlines, however, blows a lot of this out of the water. The concerns listed above will still matter to some airlines; indeed, many full-service carriers we’ve spoken to in the last 12 months as part of our IFC report remain protective of a curated IFEC experience, and do not see Starlink’s open connectivity offering as fitting with their passenger experience strategy. LCCs may also look elsewhere, to lightweight connectivity and digital service platforms. So Starlink will not win every contract. What is clear, however, is that the hesitancy which prevailed among major airlines is beginning to dissipate and the road ahead for Starlink to become the leading provider in the IFC market is beginning to open up.
There is no denying United’s decision will have hit GEO service providers hard. Viasat won a new contract with United only a few years earlier and those aircraft are still in the process of being delivered. For what its worth, Viasat has stated it believes its contracted aircraft “will remain in service through the remaining years of our contract with United Airlines”.
In many ways, the recent big wins for Starlink are no surprise. An earlier article published by Valour Consultancy, highlighted the difficulty which GEO operators are facing in the market at the moment. Their concern is evidenced by the significant amount of M&A activity we have seen in recent years – with Viasat acquiring Inmarsat, SES acquiring Intelsat, and Eutelsat merging with OneWeb. The road ahead looks difficult for GEO operators in the IFC market, and they will need to prove their worth if they don’t want to get swept away in the LEO tide.
What Does the Future Hold?
Whatever the precise rollout of United’s Starlink service looks like, it’s certain that this deal represents a significant moment in the operator’s short history, and in the IFC sector, more generally. We are now firmly in a new era where more and more new contracts will be won by vendors positioning LEO-only or multi-orbit solutions, powered by new generation ESAs (electronically-steered antennas), and delivered to the passenger free of charge. Starlink has a seat at the main table, and it’s here to stay.
