Food For Thought:

We don’t think anyone in our industry will dispute the fact that connectivity is here to stay. Passenger expectations are driving that demand, and airline operations are too. However, have any of you IFEC aficionados noticed that the rate of connectivity installations is slowing down? This may seem a bit surprising given all the hype over connectivity, point in fact, over the past five- or six-years connectivity has been the primary focus of every trade show this publication has attended: AIX, APEX, FTE, etc. Think about the buzz phrases: gate-to-gate, end-to-end passenger experience, the connected aircraft – they all focus on the use of connectivity to improve the airlines’ ability to touch the traveler throughout their journey and tailor their experience to meet expectations. So why the slow down? One factor we believe is that operators are grappling with decisions regarding Ka- vs. Ku-band. A connectivity decision is a costly venture and is typically a hardware commitment for their fleet for the next 7 – 10 years. The airlines are faced with sifting through all the pros and cons of each solution to determine which is the most viable and reliable option to fit their model. Now throw in the possibility of the LEOs and things became a lot more complicated. Also, antenna installations are not a penny a dozen – they are expensive and complex. Add to that the recent statements released by the FAA regarding antenna/radome installations and the Airworthiness Directive issued by EASA and airlines are likely to pause over making a quick decision. Given these issues, we also expect it to be more challenging for some connectivity suppliers to generate near-term investment capital.

Needless to say, connectivity suppliers and hardware vendors have made a large commitment and there are many players in the field – maybe too many. As we mentioned in an earlier issue of IFExpress, we expect continued consolidation within our industry. Along those lines, we have heard that one of the majors in the IFE arena is making a play for the commercial division of a major connectivity company, as well as, the connectivity portion of second significant industry vendor – despite one or both of the potential acquisition companies having issues with significant debt. We are hearing DIP (debtor-in-possession) financing is being discussed. The company making the acquisition overtures evidently sees the potential is greater than the risk involved. And interestingly, they will also become a Ku-band operator, as well as, a GX Aviation (Ka-band) reseller.  If the stars align, these acquisitions will launch them into the first-tier position in the Big Three – at least as far as connectivity is concerned. We live in interesting times.

---

SmartSky:

During APEX we had the opportunity to sit down with Nancy Walker, the new CCO, and Ryan Stone, president of SmartSky Networks, to discuss the status of their 4G LTE air-to-ground (ATG) connectivity service roll-out. Nancy joins SmartSky with 30+ years of experience in the aviation industry having worked for NASA, Harris, LiveTV and Thales.

We were told that SmartSky is in the process of standing their ground towers, and at the time of the interview 77% of them were in the final stages of installation/completion. Currently, the company is focusing their ground-based installation activity on very specific channels: New York to Chicago and Chicago to Florida. The team said they are well on the way to launching their first business aviation customer and that they are in an active demonstration phase. Nancy told us that they have 1,000 of ours of flight test time logged on three different aircraft models and that they had just received their 96^th patent!

What SmartSky offers using their 2.4 GHz unlicensed spectrum and patented 4G LTE beamforming technology is a path to get data off the aircraft very quickly. In fact, they claim their high bandwidth capability off the aircraft is unique to their service offering. The SmartSky ‘pipe’ is designed to provide 4 GB/hour to the aircraft and 3 GB/hour off the aircraft. What this translates to is a low latency network that allows users to receive large attachments in their email, and easily stream video on their Wi-Fi enabled PEDs. Ryan Stone went on to say that SmartSky is using a highly patented technology that helps make the system more secure. Not only do they use encryption technology, but the system utilizes a very narrow and specific beam, requiring a low power level to transmit to the ground; therefore, security is innately enhanced.

Since our interview in Boston, Penstastar Aviation developed an Approved Model List (AML) Supplemental Type Certificate (STC) that permits SmartSky installations on the Gulfstream GIV-X models and GV-SP as well, and the first customer installation has occurred in the business aviation market.  The company is looking to enter the commercial realm but firmly believes that more general aviation operators will be utilizing the system before airlines enter the mix.  It wouldn’t surprise us if a North American carrier were to add the SmartSky Network onto their aircraft in conjunction with an already installed connectivity system. After all, that is a current airline trend: multiple suppliers for connectivity. This is one to watch!

---

AIRBUS

A330 – 800
The first A330-800 development aircraft to fly, MSN1888, landed at Toulouse-Blagnac, France at 2:35pm local time after successfully completing its first flight which lasted four hours and four minutes. The aircraft, the second member of the A330neo Family, is powered by the latest technology Rolls-Royce Trent 7000 turbofans. “Today’s first flight of the A330-800 is the latest addition to our efficient Widebody family,” said Guillaume Faury, President Airbus Commercial Aircraft. “The A330-800 is an exceptionally versatile ‘route-opener’, offering unbeatable economics for airlines – encompassing everything from short to very-long haul widebody missions.” He added: “We look forward to the successful flight-test campaign, leading to certification next year.”

The A330-800’s development program will include around 300 flight-test hours, paving the way for certification in 2019. Its sibling, the larger A330-900 family member, recently completed its development testing and certification program which validated the A330neo Family’s common engines, systems, cabin and flight & ground operations.

The A330neo comprises two versions: the A330-800 and A330-900. Both of these widebody aircraft incorporate new Rolls-Royce Trent 7000 engines, nacelle, titanium pylon, new wings and offer an exclusive ‘Airspace by Airbus’ passenger experience. The larger A330-900 will accommodate up to 287 seats in a typical three-class layout, while the A330-800 typically will seat 257 passengers in three classes. At the end of September 2018, Airbus’ order book includes 13 customers who have placed orders for a total of 224 A330neos, with more to be added soon.

Airbus will fly an airBaltic A220-300 new generation single aisle aircraft, to five cities in four countries as part of a world demonstration tour.  The A220 demonstration tour is a great opportunity for Airbus to showcase its newest family member in front of airlines and media and to offer a close up view of the aircraft`s outstanding characteristics, comfort, and performance, that benefit both operators and passengers alike. airBaltic’s A220-300 features a comfortable cabin arrangement able to accommodate 145 passengers in true widebody comfort. The Latvian airline already operates 13 A220-300s out of a total of 50 ordered. The A220 is the only aircraft purpose built for the 100-150 seat market, it delivers unbeatable fuel efficiency and true widebody comfort in a single aisle aircraft. The A220 brings together state-of-the-art aerodynamics, advanced materials and Pratt & Whitney’s latest-generation PW1500G geared turbofan engines to offer at least 20 percent lower fuel burn per seat compared to previous generation aircraft. With a range of up to 3,200 nm (5020 km), the A220 offers the performance of larger single aisle aircraft.With an order book of over 400 aircraft to date, the A220 has all the credentials to win the lion’s share of the 100- to 150-seat aircraft market.

A220 – 300 TOUR

The A220-300 will first attend the Zhuhai airshow (China) from November 5^th until November 8^th before flying to Chengdu on November 9^th. The aircraft will continue on its journey with a stopover in Koh Samui (Thailand) on November 10^th  before flying to Kathmandu (Nepal) on November 11^th. After that the airBaltic A220 will go to Istanbul (Turkey) on November 12^thbefore returning to its home base in Riga (Latvia) on November 14^th.

---

IATA

The  group forecasts an annual increase in global traffic growth over the next 20 year-end to double emplacements (8.2 Billion) by 2037. Interestingly (and expectantly), China will become the world’s greatest aviation market (to, from, within) the country supposedly by mid – 2020’s. Look for India to become third!

---

ICELANDAIR & WOW AIR

It looks like Iceland Air just bought out Wow Air and they will still operate separately out of the Icelandic aviation market. With less than 4% of the transatlantic market, both airlines have “challenging” profit issues and this may be a start to reduce that stress. While Wow had been working on a public offering before this announcement, the airlines appear to have seen value in the joining before that event occurrence. The naming of the final organization might be interesting.

---

GOGO

Gogo Announces Third Quarter 2018 Financial Results as follows:

• Consolidated revenue of $217.3 million, up 26% from Q3 2017
• Net loss of $37.7 million, an improvement of 17% from Q3 2017
• Adjusted EBITDA(1) increased to $21.1 million, up 63% from $13 million in Q3 2017
• BA segment profit increased to $35.2 million, an increase of 65% from Q3 2017
• 898 2Ku aircraft online on 14 global airlines, with 113 aircraft coming online in Q3 2018

---

OTHER NEWS

• Perhaps it’s time for women to be more involved with the aviation industry because it sure seems so in some other areas? Here’s a quote from an interesting article in Business Insider: “In what may well have been a first in any country’s history, Iceland’s government actually studied whether macho posturing led to its economic meltdown. Its conclusion can be summed up in one word: yes.” Iceland ranks high for gender equality – Business Insider
• Looking for work? Read this!! Here’s What Hiring Managers Actually Care About