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Wednesday, 08/25/2004 3:52:39 PM

Wednesday, August 25, 2004 3:52:39 PM

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IFE Systems Increasingly Important in Competitive Market; Spurred in part by JetBlue's inflight TV offering, carriers of all shapes and sizes are evaluating new IFE options.

By Paul Seidenman and David J. Spanovich
1 August 2004
Overhaul & Maintenance

Sophisticated inflight entertainment (IFE) systems are finding their way into the passenger cabins of low-fare carriers, giving the operators a new competitive weapon. Systems offering multi-channel satellite TV, games, music and movies on seat-back monitors are moving the discounters away from the no-frills, basic transportation model and, in response, legacy carriers also are examining new-generation IFE systems.

``In the United States, a major reason for this is the success that JetBlue has had with in-seat satellite TV,'' said John Craig, chief engineer-cabin systems, Boeing Commercial Airplanes. ``That's why Boeing is getting inquiries from JetBlue competitors about (factory installed) systems of this kind.''

For Craig, this is history repeating itself. ``During the 1990s, in-seat IFE systems started to be installed in twin-aisle aircraft, and it wasn't long before almost every buyer of twin-aisle equipment wanted these systems. The same is now happening with single-aisle aircraft.''

For example, executives at Spirit Airlines will decide by this fall about offering some type of IFE. The airline is looking at portable plug-in devices, as well as embedded seat-back systems that would offer satellite television, movies and games, said Lynne Korman, Spirit's senior director of marketing and communications. If the carrier selects an embedded IFE product, it would be installed on Spirit's new fleet of Airbus A319 and A321s that will start to be delivered in April 2005. Spirit has 35 Airbus aircraft on firm order with another 60 options.

``We began to look at inflight entertainment in 2003 because other airlines are offering this or are about to,'' said Korman.

Delta Air Lines' decision to install the Matsushita eFX digital IFE system onboard the fleet of 36, 199-seat Boeing 757-200s operated by Song, the airline's low-fare unit, also was motivated by JetBlue, at least to some extent.

``JetBlue basically changed the game for low-fare airlines,'' said Stacy Geagan, Song's director of public relations and communications. ``We knew that a low-fare carrier with inflight entertainment was what the market now demanded, so we decided to take Song where the market wanted to go.''

Song became the launch customer for the eFX system on narrowbody aircraft. Each installation, carried out between October 2003 and March 2004 at Delta TechOps in Atlanta, took about four days per aircraft to complete and was scheduled as a stand-alone maintenance event.

The Matsushita eFX uses a seat-back combination display screen and passenger interface. Designed as a networked system, it permits passengers to play video games with those at other seats. Passengers also may select and view a movie at will and, as with a home DVD or VCR, freeze and restart the film as desired.

Along with movies, eFX offers 24 channels of live broadcast satellite television supplied by the DISH Network, along with 24 audio channels, each providing two hours of pre-recorded content. The audio channels are categorized by theme, such as rock, jazz or country western music.

Geagan said that Song is pursuing a second phase upgrade of eFX to be completed by year-end 2004. With the installation of an additional server, passengers will have a choice of 10 movies, instead of the two now available. The second server also will allow selection from what Geagan called ``hundreds of songs,'' played in the order a customer chooses. That, in fact, will replace the 24 channel audio option now in use. The upgraded system also will feature a choice of 10 video games.

For years, low-cost carriers argued that IFE adds costs that would run counter to their business plans, taking procurement and retrofit expenses into consideration. Geagan said that this argument is no longer entirely true.

``With IFE, you are really looking at a relatively small cost factor after everything else (about the operation) is considered. At the same time you are (offering) a low-cost differentiated product, which lets you charge a little more per passenger because it's available. JetBlue proved that.''

The new IFE technology being adopted by the low-fare airlines also may benefit the larger legacy carriers, making them more competitive and giving them the means to offer services that could add to their bottom line.

Bob Reding, senior vice president-technical operations for American Airlines, said the company now is studying new IFE options for its entire fleet, including those aircraft that already have IFE systems. An important focus of the study, he pointed out, is on what he termed ``value'' components.

``'Value' is the key word because it means offering what customers are willing to pay for, such as Internet access, usually provided by a third party, for an additional charge,'' said Reding.

He also stressed that nobody wants to repeat the mistakes of the 1980s and 1990s when the inflight telephone was the cutting edge technology, and every airline had to have it.

``The airlines invested millions of dollars in inflight phones that almost nobody used, because they were too expensive for most passengers,'' he said.

Nonetheless, some type of inflight Internet access, probably for an extra fee, is definitely on the horizon.

Tom Anderson, JetBlue's senior vice president, technical operations and aircraft programs, said that JetBlue is studying whether to provide Internet service as part of its IFE. ``But, the technology to deliver high quality Internet access while inflight is currently in its infancy,'' Anderson said. ``Still, JetBlue believes there will be Internet access at some point once the technology has matured.''

Boeing's John Craig reported that an Internet component within IFE is definitely a coming trend. ``The whole idea of inflight entertainment today is to bring the at-home experience to the airline cabin, including games, Internet access, audio/video presentations -- and cell phone communications.''

Industry Standards

Eric Olson, product marketing lead for Honeywell Cabin Management Systems and Services, predicted that commercial airline passengers eventually will expect two basic functions from IFE. ``They will want to be entertained as well as [be] productive. This means being able to access their e-mail and keep in touch with their offices while in flight,'' he said.

In conjunction with this, Olson said, all airlines now are requesting cost-effective IFE systems that still provide what customers demand. For that reason, he believes that Honeywell's Ovation E, initially being marketed to the business jet OEMs, is well positioned for the airline market.

Ovation E is directly descended from Ovation C, originally designed for the corporate jet market by Baker Electronics (acquired by Honeywell in December 2002) as a ``federated system.'' This means that each box, or line replaceable unit (LRU), serves a specific function, such as powering a DVD player, moving map or satellite communication. The architecture encompasses five categories of LRUs -- the source equipment box, passenger interface control equipment, displays, communication and networking -- all wired together.

When Ovation E was introduced at the 2003 National Business Aviation Association (NBAA) convention, ``the next step in IFE technology was rolled out,'' Olson said.

``Now, instead of using a large number of individual boxes or LRUs linked together by wires, we have a series of modules weighing little more than a pound each that are designed to slide in and out of a metal cabinet, designed for front or top loading,'' he said. ``There is a weight and power savings, as well as a substantial reduction in wiring.'' The system's architecture is based on a gigabyte Ethernet backbone, incorporating technology that delivers information faster and more efficiently to the passengers.

Honeywell plans to announce additional features for Ovation E at this-year's NBAA meeting in Las Vegas, and by year-end, a business jet OEM as the launch customer. But, as Olson stressed, even as Honeywell was developing the system, it was envisioned that it would be applicable to the commercial airlines, thanks to its flexible architecture.

``A U.S.-based international carrier using Ovation E equipment might decide to offer its domestic passengers DirecTV, or another multi-channel television system, that is only available in the U.S. but not in Europe, the Far East or Asia,'' he said. ``This can be done in about 10 minutes simply by inserting the correct satellite TV module into the system's cabinet. If the same aircraft were to be redeployed to Europe, the DirecTV compatible module could then be removed and a module for some other satellite TV service could be inserted -- with no changes to wiring or LRUs.''

Honeywell, Olson said, expects to start getting serious inquiries from the airlines about Ovation E in 2005.

For Rockwell Collins' Airshow Systems Division, the leap from IFE for business jets to commercial airliners already is a reality with its Tailwind 560 satellite TV system. In December, Qatar International Airways became the launch customer for the system, with an order for 70, of which 35 are firm. Airbus will install the systems at the factory on the 34 narrowbody and widebody jets, which Qatar ordered from the OEM in June 2003, for delivery between 2004 and 2010. The first system will enter Qatar Airways service during the first quarter of 2005.

Chris Merry, senior director of space-based delivery systems for the Airshow Systems Division, said that Tailwind 560 receives feed from airborne satellites carrying Ku-band signals. The product is designed to operate with any major vendor's IFE product, he said.

Tailwind 560 is the latest variant of an IFE product originally developed by Airshow in 1997 for corporate jets. After acquiring Airshow in June 2002, Rockwell Collins improved the original product, then known as Tailwind 100. ``We positioned Tailwind 100 for the business jet operator who wanted to access U.S. television signals aboard their aircraft. Because of technology enhancements, we knew we could look at other markets,'' he said.

To do that, Rockwell Collins teamed with antenna manufacturer AeroSat to develop a system with worldwide satellite TV capability. Dubbed Tailwind 500, it, like its predecessor, used a tail-mounted antenna. This led to the Tailwind 550, which mounted the antenna on the fuselage. With that evolution, the product was promoted to the head-of-state aircraft market, which typically uses airliner-size equipment. The Tailwind 560, a more robust version of the 550, was developed for the more demanding nature of air carrier operations.

The satellite TV system, which Qatar will integrate with a Matsushita IFE suite, will be capable of delivering up to 32 independent channels per passenger via seat-back display. Rockwell Collins, Merry said, will customize a program package licensed from outside content providers. ``We are supplying the only airline television system capable of working in multiple regions, wherever the Ku broadcasting band is available,'' he said.

The Qatar order has sparked interest from a mix of domestic and international airlines, according to Merry. The airline market, he explained, has been divided by Rockwell into two segments: long-haul widebody routes and now the intraregional narrowbody operation.

``The short segment, intraregional services tend to use conventional, distributed video systems, which are controlled by the cabin crew. We have designed Tailwind 560 to work with that format, as well as the at-seat systems under passenger control, more typical of widebody aircraft. However, we are hearing from the OEMs that the seat-back installation will become the dominant form of IFE out of the factory on both single and twin-aisle aircraft,'' said Merry.

Tailwind 560 is being installed by Airbus under its own type certificates, but Rockwell Collins plans to pursue the retrofit market via an STC'd kit that includes the antenna, radome, radome attachment, power supply, controller; and from one to four receiver decoder units of eight channels each.

``With all of the engineering drawings in place, it should take about five days to install and could be done at the time of a major airframe check,'' said Merry. ``The system is compatible with the existing power supply on the airplane, uses standard 18-20 gauge wiring and adds between 60 and 80 lbs. to

the airframe.''

Merry said that for the next three years, retrofits will account for most

of the system's sales, but that should shift to factory, or line-fit installations thereafter.

In the realm of full IFE systems, airlines are demanding greater savings in weight, power and maintenance. That was the design philosophy for the Thales Avionics TopSeries family of at-seat audio and video on-demand IFE systems, according to Brad Foreman, the company's vice president and general manager.

The two newest members of the product line, the i-4000 and i-5000, were launched this year, with a first sale of the i-4000 to Royal Brunei Airways. The systems are being retrofitted on four of the airline's Boeing 767-300s. The first i-4000, in fact, entered revenue service in March, following installation that took place over a seven-day period during a scheduled C check. At this year's Asian Aerospace in Singapore, Thales announced that Boeing selected the i-4000 as its first-ever, factory-installed, at-seat IFE for narrowbody aircraft.

The i-5000, an enhanced bandwidth version of the i-4000, has been selected by Airbus for the new A380. Airbus will install the first i-5000 later this year on the flight test aircraft.

As Foreman explained, the i-4000 and i-5000 are fully modular and customized to the aircraft and class of service. Along with on-demand video and audio, the system has the embedded capability for satellite TV and Internet connectivity.

``The i-4000 was the first IFE system qualified under the same part number for both Boeing and Airbus products, making them interchangeable among those manufacturers aircraft types,'' said Foreman. ``By doing this, we have reduced maintenance costs.''

He added that the i-4000 and i-5000 are designed for on-condition maintenance and, through the use of Thales-supplied software, a mechanic can troubleshoot the system using a hand-held wireless device. The system also affords a savings of 60% in power and 40% in weight over comparable systems.

Although reliability and maintainability are important airline requirements, there also is demand for IFE systems to be as automated as possible, according to Al McGowan, director of sales and marketing for inflight entertainment at TEAC Aerospace Technologies.

``The airlines want to get away from conventional or scripted systems which require considerable intervention by the cabin crews throughout the flight,'' said McGowan. ``For instance, they might begin with a safety briefing, followed by a playback of news and information, and then an inflight movie. Those presentations have to be activated at specific times throughout the flight, and each one involves a four to five step process.''

TEAC has introduced several systems that McGowan said afford greater automation and reliability. One product, the VE-801, is an upgrade to traditional overhead or seat-back systems, without the requirement for costly modifications. Introduced in 2003, the VE-801 simply replaces the tape-based video player already on the aircraft with a single channel digital file server. At the same time, TEAC made available a three-channel version, known as the VE-803. For either system, each of which can replace as many as three tape-based systems, installation time is about 10 minutes.

``These systems offer more automation and greater reliability, along with a reduction in the overall component weight,'' he said. ``The weight savings, in fact, is about 50%, while reliability is enhanced by five or six times that of the existing systems. The older tape-based systems normally weigh 25 lbs., while the new VE systems weight about 10 lbs.,'' McGowan said.

He added that tape-based systems have a meantime between failure rate of less than 2,000 hours, while the new TEAC systems have a meantime between failure rate of more than 10,000 hours.

The new systems are designed to work with a variety of different video formats including DVDs, solid state memory and reusable hard disc drives.

The upgrade costs per aircraft for the new digital systems run about $10,000 to $15,000, but as McGowan stressed, the return on investment comes in as little as three years, because of the lower maintenance costs and higher reliability. The new components are being installed under STCs developed by TEAC.


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