Routes to Market Report 03 - Broadband to Aircraft - Satellite ...
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Catapult Open
Routes to Market Report
03 - Broadband to AircraftCatapult Open
Contents
1. Introduction and Scope ................................................................................................................... 3
1.1. Overview: ................................................................................................................................ 3
1.2. Areas of opportunity: .............................................................................................................. 3
1.3. Case studies for the areas of opportunity ................................................................................ 3
2. Market Overview and Opportunities............................................................................................... 4
2.1. Overview: ................................................................................................................................ 4
2.2. In-Flight Wi-Fi: ....................................................................................................................... 5
2.3. Aircraft Health Management .................................................................................................. 6
2.4. Automatic Dependent Surveillance – Broadcast (ADS-B): .................................................... 6
3. Customer and Value Proposition to the Customer and End-user .................................................... 7
3.1. In-flight Wi-Fi:........................................................................................................................ 7
3.2. Aircraft Health Management: ................................................................................................. 7
3.3. Automatic Dependent Surveillance – Broadcast (ADS-B): .................................................... 8
4. Market Competitiveness ................................................................................................................. 9
4.1. Overview: ................................................................................................................................ 9
4.2. In-flight Wi-Fi:........................................................................................................................ 9
4.3. Aircraft Health Management: ................................................................................................. 9
5. Role oF UK cCompanies ................................................................................................................ 9
5.1. In-flight Wi-Fi:........................................................................................................................ 9
5.2. Aircraft Health Management: ............................................................................................... 10
5.3. Automatic Dependent Surveillance – Broadcast (ADS-B): .................................................. 10
6. Revenue projections ...................................................................................................................... 10
7. Swot Analysis ............................................................................................................................... 13
7.1. In-Flight Wi-Fi ...................................................................................................................... 13
7.2. Aircraft Health Management: ............................................................................................... 13
7.3. ADS-B: ................................................................................................................................. 14
8. Opportunity Blockers and Enablers .............................................................................................. 14
8.1. Overview: .............................................................................................................................. 14
8.2. Inflight Wi-Fi: ....................................................................................................................... 14
8.3. Aircraft Health Management: ............................................................................................... 15
8.4. ADS-B: ................................................................................................................................. 15
9. Market Dynamics .......................................................................................................................... 16
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9.1. Aviation procurement in general: ......................................................................................... 16
9.2. In-flight Wi-Fi:...................................................................................................................... 16
9.3. Aircraft Health Management: ............................................................................................... 16
9.4. Automatic Dependent Surveillance – Broadcast (ADS-B): .................................................. 16
10. Market Trends ........................................................................................................................... 17
10.1. In-flight Wi-Fi:.................................................................................................................. 17
10.2. Aircraft Health Management: ........................................................................................... 17
10.3. ADS-B: ............................................................................................................................. 17
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1. Introduction and Scope
1.1. Overview:
This paper presents a market opportunity assessment on the use of broadband within aircraft,
focusing specifically on applications which make use of digital connections. Today, the focus on
broadband within an aviation environment is on customer services and entertainment where naturally
there may be an expected price premium to be paid for convenience.
However, as aviation itself moves from a paper-based world to a digital data based world, the demand
for (digital) communications via broadband is also expected to increase. Aircraft with advanced
communication capabilities (so-called connected aircraft or e-enabled aircraft) are being used for
commercial flights. Near real-time data communications will enable a whole host of performance and
service improvements.
1.2. Areas of opportunity:
This report sees three areas of opportunity:
• Safety-critical services: Air Traffic Control (ATC) including Voice over IP (VoIP), 4D trajectory
management, Space-based NAV / SUR (e.g. Automatic Dependent Surveillance – Broadcast
(ADS-B)), System Wide Information Management (SWIM), live streaming Search and Rescue,
etc.
• Services that deliver operational improvements: basically Airline Operational
Communications (AOC), including aircraft health monitoring, electronic flight bag, real-time
MET(eorology) / Notice to Airmen (NOTAM) / Aeronautical Information Publication (AIP), etc.
• Passenger services: where the main need is much increased bandwidth, given a tolerance for
a lower quality of service, than more safety and operational critical services. However,
improved passenger services are a major driver for connectivity.
Some use of low-bandwidth SATCOM is already utilised in oceanic airspace or areas of limited
terrestrial infrastructure. The applications listed above are not all fully developed yet and the amount
of data that will be required for transmission to support these applications (e.g. SWIM) is not fully
developed as the specifications of the service and the way in which it will be utilised operationally are
not yet known. Whilst exact future applications are impossible to predict with any certainty, the
collective potential for improved broadband to aircraft is clear.
1.3. Case studies for the areas of opportunity
Figure 1 presents an illustration of the relative expectations of market demand for a selection of the
above listed applications which will be dependent upon airborne broadband in the future. The level
of demand placed on these will be estimated noting that this represents a limited subset of what
would eventually be expected.
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Figure 1: ‘Broadband to aircraft’ opportunities coloured green are explained in this study
This market opportunity analysis has chosen the following case studies to explore the ‘areas of
opportunity’ in more detail:
• Safety-critical services - ADS-B
• Services that deliver operational improvements - Aircraft Health Monitoring
• Passenger services - In-flight Wi-Fi
These opportunities were chosen because they are expected to have high market value and either
currently operate requiring a high bandwidth or would operate more effectively with a higher
bandwidth.
Note: This report focuses on the UK and Europe but has not actively excluded any region around the
world. Also, no opportunities have been deliberately omitted.
2. Market Overview and Opportunities
2.1. Overview:
Airline Operational Control (AOC) has traditionally supported simple applications that automate some
elements of the airline operation. As airlines have become used to the availability of datalink, there
has been an explosion of AOC applications, particularly in recent years, as airlines seek to optimise
flight operations and fleet management. AOC applications are traditionally based on pre-defined
message sets which are limited in terms of content (e.g. no graphics). New AOC applications require
IP connectivity and much higher bandwidth to support a much richer message set. There is an
overarching opportunity here in that take up would be higher if the total operating costs associated
with communications were lower and a higher capacity.
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Today, on average, 400kB of data related to AOC operations is transmitted per flight through a mix of
SATCOM and other terrestrial data links. An additional 33kB is transmitted per flight for a single
weather update as well as incremental weather reports transmitted back to the ground. Given just
the flights flown in Europe out to 2020, this is an average of 4.7TB of data per year.
In addition, Air Traffic Control (ATC) applications have not used satellite based communications except
where needed given the frequency of high bandwidth voice communications that would be required.
As airspace users and Air Navigation Service Providers (ANSPs) seek new ways to reduce ATM service
costs, there is increasing demand for new datalink applications and provision of dynamically updating
aeronautical data.
These new ideas are beginning to generate bandwidth but are not fully understood in terms of the
value proposition. Depending on their business models, each player in the aviation chain will have a
different perspective in regards to the economic and capacity impacts of any decisions made by them.
2.2. In-Flight Wi-Fi:
Currently, it needs to noted that demand is ahead of supply. A 2016 SITA IT report stated that 89% of
airlines see inadequacy of Wi-Fi and Internet access in-flight as an issue with 55% believing it to be a
major challenge.
In-flight Wi-Fi is an increasingly common offering on budget and flagship airlines alike. Demand for
Wi-Fi on board for both crew and passenger usage is rising, and leading to a decline in traditional
Inflight Flight Entertainment (IFE) as airlines seek to provide connectivity and entertainment through
the passenger’s own device. It can be assumed that by the early 2020s all airlines will provide multi-
media streaming to the passenger’s own device and wireless internet access. In the short-term, in-
flight Wi-Fi offers potential extra revenue to a tight margin industry, particularly on short haul flights.
There are many different providers with a range of data speeds. It is possible to provide in-flight Wi-
Fi connections using Air to Ground cellular towers and Satellite technologies. The table below
summaries the most established connectivity providers in reverse order by peak data speed.1
Name Supplier Description Peak Data (Mbps) Latency Coverage
Swift Broad band Inmarsat Satellite 0.332 High Global
ATG Gogo Cellular Towers 3.1 Low US
ATG-4 Gogo Cellular Towers 9.8 Low US
Ku Intelsat and SES Satellite 30 High Global
Ka Inmarsat Satellite 50 High Global
2Ku Gogo* Satellite 70 High Global
*through Intelsat and SES Ku satellites
Peak data speeds for satellite technologies currently operate at 30MBps through the likes of Ku-Band
and Ka-Band. Gogo, through their project with Intelsat and SES, hope to launch High Transfer Satellites
(HTS) to provide a 70MBps service through 2Ku-Band satellites. Air-to ground towers (cellular towers),
1 Source: The Anatomy of inflight connectivity (2016)
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which are only available over land, have significantly lower peak data speeds but also lower latency.
(Note, in November 2015 the average UK broadband speed was 28.9MBps.)
Aircraft need to be retrofitted with an antenna which can be done in eight hours at a cost of around
$100,000 for an ATG antenna and $500,000 for a satellite option (this excludes the opportunity cost
of the plane being grounded2. The antenna for satellite based communication is a dome shape no
larger than a 2m x 1m x 30cm tapered box3 located on top of an aircraft. In 2016 the complete system
weighs below 60kg. The antenna does increase fuel burn due to the increased weight and drag
because of the antenna and server.
2.3. Aircraft Health Management
Aircraft Health Management is a real-time tool that allows the sharing of real time data about the in-
flight performance of aircraft.
Monitoring the performance parameters of jet engines (pressure intake, flow, blade stresses etc.) is
nothing new however, in the last years, Airbus4 (2012), Boeing5 (2014), and others have started to
implement aircraft management systems that send real-time data to signal ground operation crews
of any potential maintenance issues. The data is sent before the aircraft lands, minimizing flight
schedule disruptions and maintenance-related delays.
2.4. Automatic Dependent Surveillance – Broadcast (ADS-B):
ADS-B is a technical implementation in which aircraft broadcast their Global Navigation Satellite
System (GNSS) based position to all other listening aircraft and ATC within the transmission volume.
This is limited by line of sight and becomes impractical when far from land or limited infrastructure
terrain. However, it is automated and provides a guaranteed method to identify aircraft position
without having to request it compared to traditional means such as radar.
ADS-B broadcast information (position, vector, intent) provides an alternative dataset from which to
manage traffic and in the long term, is expected to replace radar as the ATC Officer’s (ATCO’s) primary
tool for separating aircraft.
ADS-B is made up of two parts:
• ADS-B Out: This is a surveillance technology for tracking aircraft. It reports the aircrafts
position, altitude and velocity every second.
• ADS-B In: Allows aircraft to receive transmissions from ADS-B ground stations and other
aircraft. Pilots can receive subscription-free weather and traffic data.
The use of passive listening satellites rebroadcasting ADS-B messages to controllers on the ground
would provide a means for tracking aircraft and allowing controllers to more precisely control aircraft
in the future. The implementation could be either through passive listening or through a direct
transmission of ADS-B messages on the broadband link. Whilst not directly requiring a broadband link
when only transferring single aircraft details, the use of a broadband link also supports the download
2 Source: Hip Pocket Wi-Fi
3 Source: Gogo Inflight
4 Airbus
5 Source: www.prnewswire.com
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to aircraft of a complete traffic picture. This is because there are currently many different channels
used for communication to and from aircraft – each system tends to have its own link. By using
broadband to aircraft these links – including ADS-B - can be consolidated to a single link (plus
contingency as necessary).
In addition to satisfying surveillance needs for positive aircraft control, such implementations would
enable better coordination of Search and Rescue efforts in the event of loss of aircraft over the ocean
or in terrain limited areas.
3. Customer and Value Proposition to the Customer and End-user
3.1. In-flight Wi-Fi:
Currently the largest buyer of in-flight Wi-Fi is business jet owners. The service is still expensive to
install and use so only those that value it enough are willing to pay that much for it.
However, as the technology matures, the price and data speed will make it more feasible for airlines
to retrofit it on to their planes. A recent survey by SITA6 showed that 37% of airlines are already
operating aircraft with Wi-Fi and a further 29% are taking delivery of aircraft with in-flight Wi-Fi by the
end of 2019.
For airline usage, the final end-usage will of course be the passengers to allow them to browse the
internet, access emails and have videoconferences. Airlines understand that in-flight Wi-Fi is starting
to play a key role in which flight passengers choose to take. Some airlines provide the service for free
and others charge up to €14 for a 1-hour pass7.
Passengers will be able to browse the internet and make video conference calls using their own
devices at download and upload speeds comparable to that in UK households at a fraction of a cost
today.
In the short term, we will see airlines use Wi-Fi as a way of providing a more satisfying customer
experience, or in other words as a way of differentiating service between competitors. Other airlines
use in-flight Wi-Fi as a revenue generator.
In the longer term, it is expected that it will be possible to connect to Wi-Fi on almost all passenger
aircraft. This will mean that Wi-Fi will become less of a differentiator between airlines and passengers
will see it as a significant negative towards an airline if they cannot connect in-flight, compared to
today where a strong connection is considered a luxury.
3.2. Aircraft Health Management:
The ultimate consumers of aircraft health management systems are engine and aircraft
manufacturers.
6 Source: AIR TRANSPORTS INDUSTRY INSIGHTS: The airline IT Trends Survey (2016)
7 Source: http://www.edreams.com/blog/in-flight-wifi/
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The end user will be airlines. The technology offers significant operational improvements through
reduced maintenance delays and reduced flight schedule disruptions.
There are two areas that airlines will be able to use aircraft health management for:
• Real time fault management – with the aircraft still en-route, in-flight faults can be
communicated to the ground and diagnosed. This allows ground staff to make operational
decisions regarding maintenance and deploy the necessary parts, people and equipment to
mitigate the issue. Receiving this critical information as early as possible will significantly
reduce the delays due to maintenance and repairs.
• Performance monitoring – To support an aircraft’s fuel efficiency it is possible to analyse the
aircraft’s cruise performance data. This includes information regarding fuel efficiency,
emission levels and other performance factors.
More generally for other AOC applications, such as; electronic flight bag, real-time MET / NOTAM /
AIP will enable improvements for airlines in several other areas also through the provision of real-time
information. For example, to improve flight safety or to enable airlines to provide a more efficient
service to customers and make cost savings, including:
• Improved delay management and scheduling
• Better fleet management
• Increased efficiency and predictability
• Better service for passengers
3.3. Automatic Dependent Surveillance – Broadcast (ADS-B):
The main customer purchasing the ADS-B receiver will be airlines or the aircraft owner.
The aircraft owner will receive many benefits from having an ADS-B installed, including:
• Traffic – When using an ADS-B In system, a pilot can view traffic information about
surrounding aircraft if those aircraft are equipped with ADS-B out.
• Weather – Aircraft equipped with universal access transceiver (UAT) ADS-B In technology will
be able to receive weather reports, and weather radar through flight information service-
broadcast (FIS-B). [Currently USA-only]
• Safety – similar to the traffic benefit, pilots will have significant situational awareness reducing
the chance of a safety incident. ADS-B will also provide pilots with more flexibility in
emergency situations.
Additionally, even though Air Navigation Service Providers may not be paying to install the ADS-B
device, they will be able to:
• Offer an improved service – ANSPs can provide an improved service (increased safety and
reduced separation) through increased positional accuracy.
• Reduce expenditure - They will also be able to reduce infrastructure expenditure on expensive
radar equipment in the future.
• Offer a remote service - It may become possible to provide air navigation services from
anywhere around the world.
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4. Market Competitiveness
4.1. Overview:
Currently ATC and AOC applications are provided over Aircraft Communication Addressing and
Reporting System (ACARS) Very High Frequency (VHF) and in Europe VHF Data Link Mode 2 (VDL2).
The increase in AOC traffic is leading to a global roll-out of VDL2 in advance of any additional mandate
for ATC applications. Issues with VDL2 performance for ATC in Europe are leading to possible
opportunities for SATCOM. In particular, airlines may decide to offload AOC data to SATCOM.
In the longer term, SESAR are developing a next generation terrestrial datalink, provisionally referred
to as L-band Digital Aeronautical Communication System (LDACS), that would support advanced ATC
applications. LDACS is unlikely to be available before 2022 and could be used alongside SB Safety in
the SESAR Multilink concept to support Full 4D applications. This however, still leaves provision of
broadband services in remote areas to be provided via SATCOM.
4.2. In-flight Wi-Fi:
There are currently no alternatives. Use of terrestrial solutions are not currently possible at altitude
due to interference issues and limitations on the antenna reception angles on the ground.
4.3. Aircraft Health Management:
As mentioned previously, aircraft can currently record sensing data to monitor the health of jet
engines and other aircraft systems. The data is either transferred to ground technicians and other
operational decision making parties by:
• ACARS, which is a digital datalink system for transmission of short messages between aircraft
and ground stations via air band radio or satellite.
• Waiting until the aircraft lands and an update will be sent to the technicians at the airport.
For Aircraft Health Management to work effectively a higher data upload rate will be required than
ACARS can provide. Also the data needs to be sent in real-time to see the full benefits which makes
using transmission once landed not an option.
Automatic Dependent Surveillance – Broadcast (ADS-B):
There are currently no alternatives without requiring the installation of a ground based network of
ADS-B receivers. Reception in oceanic or remote areas is impossible without the involvement of space
assets.
5. Role oF UK cCompanies
5.1. In-flight Wi-Fi:
Inmarsat for the provision of satellite broadband services (e.g. Swift Broadband and Global Xpress
services). Inmarsat, through Global Xpress Aviation (GX), has four Ka-band High Throughput Satellites
(HTS) in orbit positioned to provide worldwide coverage. Each satellite carries 89 spot beams with up
to 50 Mbps per beam. 8
8 Source: www.satellitetoday.com
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Recently Honeywell and Boeing have teamed up on GX to help provide the fourth satellite.
Inmarsat, long a provider of satellite communications to the maritime industry, has spent five years
building its Global Express network for aviation.9
5.2. Aircraft Health Management:
For engine manufacturing, Rolls-Royce already do remote monitoring of aircraft engines to be able to
diagnose faults whilst the aircraft may already be in flight. Increased bandwidth may provide
additional opportunities for more data to support earlier diagnosis and avoidance of costly
unscheduled stops.
5.3. Automatic Dependent Surveillance – Broadcast (ADS-B):
As a primarily surveillance application, this would allow companies such as NATS UK to tender for the
provision of air traffic services in different parts of the world, or to support specific operations of
British aircraft operating overseas. New air traffic control applications such as the Unmanned Traffic
Management (UTM) system and U-Space within Europe will compound the need for a service able to
detect via datalink (broadband) aircraft that could not be detected through traditional radar.
6. Revenue projections
2016 2017 2020 2030
Current levels Scale of Scale of Scale of
growth*/decline growth/decline growth/decline
In-flight Wi-Fi $2,796M $3,216M (15.0%) $4,891M (15.0%) $13,228M (6.0%)
Aircraft Health $3,438M $3,661M (6.5%) $4,423M (6.5%) $6,699M (2.0%)
Management
ADS-B $428M $516M (20.61%) $905M (20.61%) $3,631M (4.61%)
*Compound Annual Growth Rates (CAGR) figures are shown in brackets.
Calculation of these figures:
Below explains where the how these figures were calculated and the source of the data.
In-flight Wi-Fi:
The revenue for in-flight Wi-Fi has been calculated by taking a revenue estimate from ‘Persistence
Market Research’10. They predicted that;
‘The global in-flight Wi-Fi market was valued at US$ 2,114.3 million in 2014 and is expected to
witness a healthy Compound Annual Growth Rate (CAGR) of 14.9% from 2015 to 2021.’
It was assumed that after 2021 the CAGR would fall by 1% each year from 15%.
The graph below shows that by 2020 the in-flight Wi-Fi market is expected to have a total revenue
of $4,891M and by 2030 $13,228M.
9 Source: http://uk.reuters.com/article/us-airlines-wifi-satellite-idUKKCN0X8200
10 Source: http://www.persistencemarketresearch.com
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13,228
In-Flight Wi-Fi Expected growth
14,000 22%
Expected market Value ($M)
Calculated market value
12,000
17%
10,000
8,000 12%
CAGR
4,891
6,000
3,216
2,796 7%
4,000
2%
2,000
- -3%
Expected Market Value ($M) Compound Annual Growth Rate (CAGR)
Aircraft Health Management:
The revenue for Aircraft Health Management has been calculated by taking a revenue estimate
from ‘MARKETS AND MARKETS’11. They predicted that;
‘The global Aircraft Health Monitoring Systems Market is projected to reach USD 4.71 Billion by
2021, at a CAGR of 6.53% from 2016 to 2021.’
*Note this includes avionics
It was assumed that after 2021 the CAGR would fall by 0.5% each year from 6.5% in 2021.
The graph below shows that by 2020 the aircraft health management market is expected to have a
total revenue of $4,423M and by 2030 $6,699M.
Aircraft Health Monitoring Systems Expected growth
14000 22%
Expected market Value ($M)
12000
17%
10000
6,699
12%
3,438
3,661
4,423
8000
CAGR
6000 7%
4000
2%
2000
0 -3%
Expected Market Value ($M) Compound Annual Growth Rate (CAGR)
11 Source: http://www.marketsandmarkets.com/PressReleases/aircraft-health-monitoring-systems.asp
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Automatic Dependent Surveillance – Broadcast (ADS-B):
The revenue for Automatic Dependent Surveillance – Broadcast has been calculated by taking a
revenue estimate from ‘MARKETS AND MARKETS’12. They predicted that;
‘The Automatic Dependent Surveillance-Broadcast (ADS-B) market is projected to grow from USD
427.8 Million in 2016 to USD 1,316.9 Million by 2022, at a CAGR of 20.61% during the forecast
period.’
It was assumed that after 2021 the CAGR would fall by 2% each year from 20.61% in 2022.
The graph below shows that by 2020 the ADS-B market is expected to have a total revenue of
$905M and by 2030 $3,631M.
Automatic Dependt Surveillance - Broadcast (ADS-B)
14000 25%
Expected Market Value ($M)
12000
20%
10000
CAGR
8000 15%
6000
3631
10%
4000
5%
905
516
428
2000
0 0%
Expcted Market Value ($M) Compund Annual Growth Rate (CAGR)
Further discussion on the ADS-B market:
Costs associated with ADS-B and the market size are dependent upon who the eventual customer
is. There are opportunity costs for the ANSPs to reduce the overall ground surveillance
infrastructure by substituting for radar surveillance with ADS-B via satellite.
Initial estimates based on a single average flight in Europe would show approximately 12.6kB of
data transmitted via ADS-B. If this is transmitted to the ground via satellite monitoring all flights in
the globe, then approximately 500 GB of data would be transmitted annually purely for ADS-B
purposes. Not all of this will however be transmitted via satellite – except for data monitored
passively such as the services provided by Aireon.
The move to ADS-B over satellite would provide a different route for transmitting longer messages
that are not subject to frequency congestion as in busy continental airspace. Several parameters
are available via ADS-B which could also be useful EO purposes – such as being able to derive wind
speeds and directions as different altitudes based on aircraft heading and ground track. These
messages are however not routinely used due to the restrictions in the transmission slots. The use
of a broadband service that could interrogate more of the ADS-B message set would lead to better
knowledge of the aircraft’s position and intentions and facilitate further innovation around other
uses of such data. This is open to others beyond just the ANSP market as anyone with access to the
data could develop new applications or algorithms to deliver operational benefits.
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7. Swot Analysis
7.1. In-Flight Wi-Fi
Strengths Inmarsat has a strong position in global market. It has its own high transmission
satellite service and has one of the highest peak data speeds. It also provides global
coverage.
Weaknesses Potentially of most interest to consumers on longer flights. Average flights within
Europe are 1.5 hrs in duration. So could be weak demand on internal and overland
flights.
Opportunities Increasing demand for data driven services. Competition between airlines and
willingness to attract premium paying passengers.
Threats New emerging ground based communication links are potentially providing
individual spot beams per airframe that will result in data transfer rates typical of
4G environments. This is delivered per aircraft rather than over a shared
connection between multiple aircraft as in the case of a satellite and is more akin
to the terrestrial mobile phone communications link where each mobile phone has
its own link. Examples of these developments are illustrated by the solutions being
developed by SmartSky Networks (http://www.smartskynetworks.com).
7.2. Aircraft Health Management:
Strengths Provides universal and global coverage for services which do not require low
latency and have relatively low bandwidth requirements.
Weaknesses Data may not be deemed critical enough to warrant investment from either the
airlines or the engine manufacturers. Proprietary nature of data and sensitivity
would be an obstacle for new data analysts market entry.
Opportunities Increased awareness of costs associated with
Threats The anticipated demand from AOCs and Engine manufacturers does not
materialise and most data remains collected and stored on the aircraft till landing.
Data upload then utilises ground based networks and does not rely on SATCOM.
12Source:
http://www.marketsandmarkets.com/Market-Reports/automatic-dependent-surveillance-broadcast-market-
176333898.html
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7.3. ADS-B:
Strengths Provides universal and global coverage without the need for complex and
expensive ground infrastructure networks. Enables ATC direct control in areas
which would previously only been able to exercise procedural control.
Weaknesses Comparatively 10 times as expensive under today’s operations as an existing
surveillance system due to the cost per message set that has to be transmitted via
the satellite.
Opportunities Global pressure for flight tracking following the loss of MH370. Regulatory
developments.
Threats Increased requirements to place ADS-B on RPAS and drones leading to spectrum
overload in specific airspace. Divergence on frequencies used for ADS-B
transmissions to negate frequency congestion.
8. Opportunity Blockers and Enablers
8.1. Overview:
Cost, or even perceived cost, could be a deciding factor in driving airline adoption of AOC applications.
SATCOM has historically been seen as an expensive form of datalink communication and airlines
therefore frequently use a ‘store-and-forward’ process to send non-time critical AOC and Airline
Administrative Communications (AAC) messages (e.g. engine performance reports) when a cheaper
datalink is available, rather than transmit messages over ACARS. The cost point will need to be
competitive with terrestrial data services such as VHF, airport Wi-Fi (WiMAX/AeroMACS) and other
gate communications, to encourage SATCOM.
8.2. Inflight Wi-Fi:
What has been holding in-flight Wi-Fi back?
• Regulation - The differing regulations across Europe governing Air to Ground (ATG) networks
has hindered the creation of any substantial ATG networks, while satellite-based systems have
until now been too expensive for short-haul routes.
• Technology - Until recently the satellite technology was not ready to support in-flight Wi-Fi.
However, satellite technology can now provide global coverage, including over oceans, which
ATG is unable to do. It may also be possible to overlay additional satellite beams to provide a
higher capacity for areas with greater traffic.
What can be done to help realise the growth?
• Inmarsat is the only serious UK supplier of in-flight Wi-Fi. It is worth focusing efforts on
ensuring that they succeed. The market is already very competitive, with many suppliers and
there is expected to be only room for between three or four suppliers according to David
Bruner, vice president of global communications services at Panasonic Avionics.13
13 Source: http://uk.reuters.com/article/us-airlines-wifi-satellite-idUKKCN0X8200
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8.3. Aircraft Health Management:
What has been holding Aircraft Health Management back?
• Technology - Cost and data throughput volume are the main inhibitors to a constant stream
of all the data from the aircraft while in flight. On average 500GB of data will be generated
per flight.14 It is possible to ping the flight and ask the aircraft to send back specific data using
ACARS but this would prove very expensive and will not provide the required capacity.
• Data security – there are concerns that broadcasting flight data will increase the opportunity
for hacking threats to disrupt aircraft software and controls. However, this is unlikely to pose
a significant obstacle in the development of this opportunity as there are rigorous regulations
in place to ensure aircraft security is not hacked.
What can be done to help realise the growth?
• Establishing the necessary levels of connectivity.
• Enabling everyone involved in a flight – airline, airport, Engineering team, crew, pilots to have
access the data they need.
8.4. ADS-B:
What has been holding ADS-B uptake back?
• Buy-in - Not all aircraft are ADS-B capable. For the aviation industry to make full use of ADS-B
technology it requires all aircraft will be required to be ADS-B capable.
• Cost - General Aviation aircraft are more reluctant to install ADS-B Out than commercial
aircraft because they struggle to see the benefits given its relative expense.15
• Regulation - The continued uptake of ADS-B will be dependent on whether it becomes
mandatory or not. Note: In the US, the FAA have made it mandatory by 2020.
What can be done to help realise the growth?
• Regulation - By pushing national regulators to make ADS-B mandatory the up-take of the
technology will significantly increase.
• Uptake in new aircraft- Any new aircraft will be fitted with ADS-B which means that by 2020
all planes including small aircraft should be fitted with ADS-B.
14 Source: SITA – OEM Data
15 Source: Avionics: Pay to Play: The Cost of ADS-B and Where to Find Financial Assistance (2017)
15Catapult Open
9. Market Dynamics
Who are the key stakeholders and players in the main market sectors of interest to UK Space
Community and what is their relationship to each other in the supply chain?
9.1. Aviation procurement in general:
Market entry to manned and commercial aviation tends to be difficult for new entrants without the
support of existing players. This does however, depends somewhat on the target customer as low end
aviation can use advanced equipment without the certification and regulation hurdles that dominated
in larger aircraft. From a broadband perspective, the market would then be dominated by equipment
manufacturers in the main selected by the aircraft manufacturer as part of their certification and
airworthiness programmes. Service delivery on behalf of an airline utilising a broadband link is open
to competition, either through niche product entry or partnership with one of the dominant service
companies – such as ARINC, Jeppesen, Lido or Navtech. In particular, equipment that does not interact
with aircraft systems needed to comply with airworthiness requirements may be selected by the
airline.
9.2. In-flight Wi-Fi:
As the market starts to move away from ATG provision to satellite based communications the market
is moving from regional monopolies towards a highly competitive global market.
This is visible through the numerous companies that are promising high capacity and speed globally.
The main players are Inmarsat Plc, ViaSat Inc, Gogo Inc, Panasonic and Global Eagle Entertainment Inc.
ViaSat, Panasonic and Inmarsat each have their own high-throughput satellite (HTS) service.16 Gogo,
who have a monopoly in the US, currently uses ATG but is developing its own satellite-based service,
with the help of SES and Intelsat known as 2Ku.
9.3. Aircraft Health Management:
The main players within aircraft health monitoring systems market are Airbus Group, Boeing
Company, United Technologies Corporation, Honeywell and General Electric Company.
The other prominent vendors are Rolls-Royce Holdings, RSL Electronics, Accellent Technologies and
Ultra Electrics Holdings.
9.4. Automatic Dependent Surveillance – Broadcast (ADS-B):
ADS-B from a satellite perspective is being dominated by Aireon, Inmarsat and Thales.
16 Source: Aircraft Interiors International
16Catapult Open
10. Market Trends
Is this a growing market, what are the main drivers, is the market sustainable or is there a limited
window of opportunity?
10.1. In-flight Wi-Fi:
Where will we expect to see the highest levels of growth around the world?
• The US currently represents the largest market, conquering 80% of the market as of 2016 (by
number of aircraft with in-flight Wi-Fi).
• Asia-Pacific region is expected to have the fastest growing market with an approximate CAGR
of 33%. This is due to increased air traffic and currently low penetration of in-flight
connectivity.
• Europe is expected to also see significant growth with an approximate CAGR of 28%.17
What are the main drivers for increased in-flight Wi-Fi?
• Airlines can use in-flight Wi-Fi as a differentiating service and can also use in-flight Wi-Fi to
increase revenues from selling it on flights.
• The rise in smartphone use and social networking on the move is set to increase market
expansion.
• In-flight Wi-Fi will be increasingly used for people using their personal devices for on-demand
entertainment.
Will Air-to-Ground (ATG) or Satellite technology be dominant in the future?
• The air-to-ground technology was the dominant segment in 2014. However, due to the low
speeds capable and inability to provide a service in remote locations (e.g. oceans) is set to see
a decline in market share.
• Satellite technology is anticipated to emerge as the dominant segment by 2021, due to
growing adoption of satellite technologies such as Ku-band and Ka-band by airlines across the
globe.18
10.2. Aircraft Health Management:
The aircraft health monitoring system market in the Europe region is expected to grow at the highest
CAGR between 2016 and 2021. Factors such as passenger traffic growth and increasing aircraft
deliveries are fuelling the aircraft health monitoring systems market growth in this region.
10.3. ADS-B:
Where will we expect to see the highest levels of growth around the world?
• The US has the most aircraft equipped and accounts for around one-third of the global fleet.
(Europe accounts for 20%.)
17 Source: Smart Plane Summit
18 Source: Persistence Market Research
17Catapult Open
• Western Europe is expected to be one of the fastest growing regions in the global ADS-B
market because of its increasing number of aviation production and assembly sites in the
region.19
• Aircraft manufactures have started to shift their focus towards the Asia Pacific region. This is
expected to be a key area of growth in the coming years.
What are the drivers for increased uptake of ADS-B?
• As previously mentioned, regulations will play a key role in driving the uptake in ADS-B.
• Increased situational awareness – pilots will receive signal from local aircraft and will have a
better understanding of their surrounding area.
• Improved surveillance in remote areas. Disastrous events such as MH370 going missing would
not have happened if the aircraft had been fitted with ADS-B.
19 Source: Future market insights
18You can also read
