Elon Musk Enters In-Flight Wi-Fi Market With Small Satellites

SpaceX is demonstrating to the world that its Starlink satellite network can deliver Netflix and YouTube up to 30,000 feet. The company recently demonstrated the media at a flight aboard JSX, its first customer airline.

The short jaunt from Burbank to San Jose, California marks the start of Elon Musk’s bid to seize in-flight business from satellite providers Intelsat and Viasat Inc. that already serve thousands of aircraft.

It won’t be easy, even for a serial market disrupter such as Musk.

“Are they a serious competitor? Yes,” said Jeff Sare, president of commercial aviation for Intelsat, a leading provider of wireless service on airlines. Still, Sare said, “We don’t believe there’s anybody that can beat us.”

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Starlink, part of Musk’s Space Exploration Technologies Corp., delivers broadband from a constellation of low-flying small satellites. The planet is circled by lower satellites in between 90 and 120 minutes. That’s a departure from the established practice of using a few powerful spacecraft in higher and slower orbits. Starlink has a positive side: its signals arrive earlier.

That’s a plus for the company’s core business of serving broadband to mainly rural households in sparsely populated areas. Starlink reported in its most recent filings that it had launched more than 3000 satellites and served over 400,000.

But a downside for Musk’s technology is that small satellites have less capacity and may struggle to meet the needs of big aircraft in crowded skies. Numerous airliners are swarming travel hubs with 100-plus connected passengers per plane. B. Riley Financial stated in a 2012 note that satellites travel around the world and only a small number of them may reach an area like Atlanta. This raises questions about capacity. SpaceX stated that the projected system’s speed of development is underestimated.

U.S. regulators recently cited Starlink’s “still developing technology” when they turned down the service for an $866 million government subsidy.

Starlink claims it is able to service aircraft of any size and points out an agreement that Starlink has with Hawaiian Airlines in order to be able serve larger Airbus and Boeing airplanes. Officials rejected the subsidy request by Starlink because they deemed the data speed to be too slow for the service that was planned when the celestial networks is constructed.

“You’ve got to get it to work, and you’ve got to get it cheap,” said Chris Quilty, a partner at Quilty Analytics, a consultant to the space and satellite industry. “It’s a very complex market. And the airlines have historically been exceedingly cautious.”

Starlink executive know that they have a lot of work ahead. “There are a lot of challenges to get to where we want to be,” said Jonathan Hofeller, vice president of Starlink commercial sales. “It will take time for people to adopt the mentality that JSX and Starlink have.”

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The company’s deals with JSX and Hawaiian, announced in April, came after SpaceX had pitched Starlink to four of the largest US airlines, without success, according to people familiar with the issue.

“This is a foot in the door for Starlink,” said telecommunications analyst Roger Entner. “This is the proof of concept. Once it works on JSX it will work everywhere.”

Part of the attraction for JSX was Starlink’s flat antenna, not much bigger than a large pizza box. It’s less bulky than the swiveling dishes widely used by other satellite services, so it fits atop the bodies of the smaller regional jets from Brazil’s Embraer SA that JSX flies.

The antenna “is definitely an advantage in terms of winning in-flight connectivity contracts for regional aircraft,” said Louie DiPalma, an analyst with William Blair & Co. Viasat does business with the company.

Airlines in coming years may upgrade over 1,000 aircraft in regional fleets from slow legacy internet systems, and Starlink is “a leading contender” to win such contracts, DiPalma said.

Intelsat maintains that it continues to be the most prominent provider of in-flight services, linking approximately 2000 aircraft via satellites and connecting about 1000 aircraft using air-to-ground systems. These systems communicate with Earthbound gear. Viasat claims its in-flight service serves approximately 1,930 aircraft and has agreements to equip another 1,210.

Analysys Mason, an industry researcher in satellite and space, estimates that approximately 10,000 commercial aircraft have in-flight Wi-Fi. This number is expected to rise to 36,000 by 2031. NSR stated in an email that the annual market revenue is projected to exceed $7.3 billion by 2031 from $1.9 billion 2021.

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The Starlink system registered transmission speeds exceeding 100 megabits per sec on the JSX test flight. This was measured using the Ookla app. A total of twelve people were onboard. The system was used by an additional 20-30 people per hour, thanks to these devices.

“I’m thrilled,” said JSX Chief Executive Officer Alex Wilcox, who was aboard the flight over California trying out web surfing and WhatsApp calls on the system. “It exceeded my expectations.”

A cross-country flight on an American Airlines Airbus equipped with Viasat gear, more than 100 passengers and a fully loaded American Airlines Airbus delivered 2.2 megabits per sec.

Both flights had smooth streaming of YouTube and Netflix videos. Two-way video chats via WhatsApp worked great. On each plane, email was received and sent out with ease, another selling point – or perhaps not – for those who recall air flight as a refuge from work.

Assistance from Loren Grush.

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