Friday, January 05, 2018 1:24:53 PM
"The inflight entertainment and connectivity RFP process is evolving, with increasingly savvy airlines realizing “they don’t need a fully integrated RFP and can shop for the best option for the different layers”.
https://runwaygirlnetwork.com/2018/01/04/sitaonair-details-how-airline-rfp-process-is-evolving-for-ifec/
"RFP" means request for proposal. Since I've owned IPTK for a while I watch the inflight connectivity market closely. The above quote tells me airlines are now willing to implement inflight connectivity on a piecemeal basis. All of the connectivity systems by the major airlines have until this point been expensive broadband satellite or ground based systems, and not all that successful. From the same article:
"Not unlike Gogo, which has had to fight passenger perception that Gogo means “slow-go” or “no-go” as its air-to-ground (ATG) service became capacity constrained, SITAONAIR has been the subject of unfavorable reviews as its Inmarsat SwiftBroadband-supported Internet service failed to deliver the speeds expected by the modern traveler."
And from this article, nobody is making any money.
Panasonic Avionics: “jury’s still out” on profitability of in-flight connectivity
“Prices are falling rapidly, but if you are a service provider like ourselves, you’ve got to position yourself so that you make a penny or two on every megabit you deliver,” he said. “Otherwise, the business is not sustainable. That is the biggest challenge in our marketplace today. Growth: not a problem. Profitability: a real problem.”
“Business is booming but no one is making money,” said Claude Rousseau, research director at Northern Sky Research, adding that inflight connectivity providers have a number of challenges to turning a profit that have yet to be worked out.
“It’s very capital intensive and the take rates are still too low. We see that the price for connectivity hasn’t moved much, except when it’s free, but then if it’s given for free somebody has to pay for it. In the end if it’s not the passenger, it will be the airline or the service provider, and in that latter case the service provider has a hard time recouping the money,” he said."
http://spacenews.com/panasonic-avionics-jurys-still-out-on-profitability-of-in-flight-connectivity/
Since many customers appear to unhappy with the current state of inflight wifi, and with airlines apparently now willing to go piecemeal and not soup to nuts, a new opportunity exists for IPTK. Especially since IPTK's "fflya" system would be a revenue producer for the airlines instead of a drain on resources. "shop for the best option" may result in airlines willing to compromise on what they provide in terms of connectivity. "fflya" doesn't stream video but does anything else online.
"What we developed is our own Bluetooth characteristic optimised for aircraft networks and satellites. The justification was all our communications and all modern communication platforms are short burst data, including Email, SMS, IM, Google, Twitter, Banking, News, Booking, Billing, Weather and the back end of all Social Networks."
Faster installation, cheaper data, revenue producing may have the major airlines taking a look at IPTK who until this point have only marketed to the low cost carriers, none of whom have wifi.
Some of the stock related inflight wifi companies aren't doing too well
GOGO doesn't expect profitability until 2019
ABWN not profitable and loaded with toxic financing
ENT still delinquent in their filings and working hard to stay out of default with their lenders.
Maybe I'm looking at this too personally. I'm the type of flyer that would like to be connected while aloft. I couldn't care much about streaming videos. I download movies before I go. I guess without broadband I couldn't watch videos on facebook or instagram but I don't spend much time there (the sites would still work, just not stream videos). I get very frustrated when GOGO logs me out if I don't use it for 15 minutes and I have to log back in to check my emails, twitter, news, etc. Would be easier to just do all that in the airline's mobile app, where fflya would be found. All connected, no payment or log in required.
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