Aero IFC Market Facing Slump due to COVID-19, but Long-Term Fundamentals Remain Solid
10-Year Growth to Approach 10%, Propelled by Aero Market Rebound and Long-Term Requirements for Connectivity
Cambridge, MA – NSR’s Aeronautical Satcom Markets, 8th Edition report projects a viable long-term In-flight Connectivity (IFC) market, despite significant near-term challenges due to COVID-19. Coming off a challenging 2018 and 2019, 2020 has already seriously disrupted the IFC market, with air traffic down by at least 80% in most regions. However, longer-term opportunities remain – once air travel resumes, planes will still require ever more connectivity, yielding a market opportunity more than 2x larger than 2019, with $5B in annual retail revenues by 2029. The next 24 months will be a challenge, no doubt – but IFC plans are largely delayed, not cancelled.
“COVID-19 has resulted in an unprecedented, sudden drop of capacity and service demand from grounded aircraft. With the pandemic impact likely to persist for at least 18-24 months, service providers are now forced to (re)visit their fixed leased capacity contracts/costs,” states report author and NSR Analyst, Vivek Suresh Prasad. “Right now, is an incredibly challenging time for all satellite mobility markets – and Aeronautical IFC has the most significant near-term headwinds,” adds Brad Grady, NSR Principal Analyst, Mobility. “Yet, NSR is largely optimistic on the longer-term uptake of Aero IFC services – passengers require connectivity now more than ever.”
Overall, Business Jets continue to be a bright spot, and longer-term Commercial Aviation markets will be the revenue driver – in total generating $37B in cumulative retail revenues over the next ten years. The migration from FSS to GEO-HTS will continue, and adoption of “Free Wi-Fi” is a significant driver for long-term capacity demand. MSS/L-band will continue to fuel operational connectivity, while General Aviation is on a growth-path for greater adoption rates. Bottom Line, while today is quite challenging, and long-term fundamentals continue to point towards more IFC adoption – weathering short/mid-term uncertainty will be the key challenge for the Aeronautical Satcom sector.
About the Report
NSR’s Aeronautical Satcom Markets, 8th Edition report is the longest-running analysis for aero connectivity markets. Covering ATG to MSS/L-band to GEO-HTS to Non-GEO HTS Connectivity options, the report gives a deep analysis into critical aspects of the IFC marketplace. Focusing on key metrics like Take-rates and penetration, Service Revenues, Business Models, and Capacity demand NSR’s Aeronautical Satcom Markets, 8th Edition gives a comprehensive analysis across the value-chain.
For additional information on this report, including a full table of contents, list of exhibits and executive summary, please visit www.nsr.com or call NSR at +1-617-674-7743.
Companies Profiled or Mentioned in this Report
Asiasat, Arabsat, ABS, Astronics, Airbus, AeroMexico, Amazon, Apple, American Airlines, ANA, Air France-KLM, Air Europa, Air eSurfing, APT Satellite, Avanti, Boeing, British Airways, Collins Aerospace, China Satellite Communications, Delta Airlines, Echostar, Eutelsat, Emirates, Etihad, Finnair, GoGo, Global Eagle, Gilat, GOL, Gulf Air, Gazprom Space Systems, Honeywell, Hispasat, Intelsat, Inmarsat, Iridium, Iberian Airlines, ISRO, Jet Blue, Lufthansa, NBN Australia, Netflix, Panasonic, Qest, RSCC, SES, SITAONAIR, SpaceX, ST Engineering, Smartsky Networks, SAS Scandinavian Airlines, Saudia Airlines, Telesat, Thaicom, Thinkom, Thales, Taqnia Space, Turksat, Turkish Airlines, United Airlines, ViaSat, and Virgin Atlantic.
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