The latest NSR report suggests that the Inflight connectivity industry is bouncing back from last year?s lagging performance. The report expects the revenue growth to happen at a faster pace for 2019.
Northern Sky Research?s (NSR) Aeronautical Satcom Markets seventh edition report has forecasted the inflight connectivity (IFC) market to reach $36b in cumulative revenue over the next decade. The forecast comes after the IFC market endured a challenging 2018 due to delays in installing equipment, indecisions by airlines, and uncertainty on business models, on top of technical and regulatory hurdles.
Overall, the market lost a bit of its shine as aeronautical connectivity grew in 2018 by $400 M ? about 40% less than expected ? but on the bright side, passenger aircraft retail revenues reached more than $1b for the first time. NSR expects 2019 revenue growth to be the same with a faster pace of inflight connectivity hardware installs to catch up on backlog.
Speaking about the findings, Claude Rousseau, NSR Research Director and report author, said that ?New and future customers have watched and learned from early adopter mainline carriers and understand better what they can get today from an IFC service onboard aircraft. As a result, the expectations of cheaper and better IFC with higher capacity and more reliable service is a deeply-rooted impression amongst airline customers,? he continued.
To amortise the still-high cost of IFC hardware and installation, the delivery of a quality service will become paramount for airlines who have growing needs across fleets for different types of connections for both cabin and crew. Over the next decade, NSR believes capacity pricing will decrease substantially and the associated savings passed to customers such that service providers will need to grow their value-added services to maintain margins.