A Starlink terminal installed on a Hawaiian Airlines aircraft.

Hawaiian Airlines

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Overview: Wi-fight

Satellite companies providing internet service to commercial airlines is one of the most mish-mashed sub-sectors of the space industry that I’ve come across over the years. 

But despite its web of partnerships and providers, in-flight connectivity (or IFC) is an increasingly valuable slice of the growing satellite communications pie – with estimates calling for IFC revenue to effectively double to over $3 billion a year in less than a decade.

And U.S. airlines have been heavily investing in satellite-based Wi-Fi: Delta last year started offering it for free to frequent fliers, JetBlue’s long offered it for free, and Spirit Airlines finished its Wi-Fi rollout in 2022. My desk neighbor and CNBC’s inimitable airline reporter Leslie Josephs, who kindly chipped in to this newsletter with her beat’s side of the story, recently paid $19.99 for Wi-Fi on a cross-country Spirit flight – service she noted was fast enough for an hour-long video call.

The last couple years have seen a flurry of IFC deals announced by airlines and satellite operators alike. Taking a quick look at the world’s largest commercial aircraft fleets, and cross-checking that against which satellites those airlines rely on, you find that Intelsat and Viasat largely dominate in deals with the top 25 or so global airlines, which together have over 7,000 planes.

Adding high-speed Wi-Fi to planes, especially for U.S. carriers, is a time-intensive process that requires FAA certificates for each type of aircraft before the terminals can get installed onboard. That’s part of where the IFC market-share messiness comes from, as deals are usually structured around installing the service on a set number of an airline’s existing or ordered aircraft types. 

Take United Airlines for example: Viasat provides service to United’s many Boeing 737 aircraft over North America and Europe, while Intelsat (having acquired Gogo’s commercial aviation business) provides service to United’s smaller Embraer regional jets over much of North America.

But the rowdy new kid on the block, SpaceX’s Starlink, is starting to chip away at the IFC market. It’s begun rolling out service to Hawaiian Airlines, which didn’t previously have Wi-Fi on its planes. Last year Starlink also announced a deal with Qatar Airways, which had previous deals with Viasat. Starlink is taking Viasat’s spot on “the entire Qatar Airways fleet,” which currently represents some 228 planes.

Starlink continues to elbow its way into more industry verticals. At the same time, adoption of satellite IFC services continues to grow. (Viasat just struck a deal with Icelandair this week.) 

As is typical with corporate sales, the financial value of these deals is often not disclosed. But perhaps more important these days, as airlines trip over each other to buy more planes and add Wi-Fi, is the length of those agreements. As evidenced by Qatar Airways, and the mosh pit of the IFC sector’s service arrangements, the frothiness of this marketplace may just be getting underway.

What’s up

  • NASA shuts down OSAM-1 satellite refueling project, which was expected to exceed $2 billion after years of delays. Last year, NASA’s Inspector General criticized OSAM-1’s lead contractor Maxar for “poor performance.” OSAM-1 had about 450 personnel working on the project. – CNBC
  • Satellites step in as backup after underwater Red Sea internet cables were cut, as four of 15 cables in the maritime region were affected. The severed cables disrupted about a quarter of the internet trafficking passing between Asia, Europe and the Middle East and turned operators to satellite services. – SpaceNews
  • SpaceX launches Crew-8 to the ISS, as the company’s Crew Dragon capsule Endeavour begins its fifth mission. The company has now delivered 50 people to orbit on 13 launches. – SpaceX
  • SpaceX launches Transporter-10 rideshare mission, carrying 53 satellites for a variety of companies including Spire, Satellogic, Lynk Global, Aerospacelab, Iceye, Atomos Space, Quantum Space, True Anomaly, the Environmental Defense Fund and more. – SpaceNews
  • Apex claims small satellite build record. Its Aries SN1 spacecraft, launched on the Transporter-10 mission, means the company progressed from a clean-sheet design to space flight in 12 months. Aries SN1 is carrying payloads for three unnamed defense companies. – Apex
  • ABL closing in on a second launch attempt of its RS1 rocket, with the company announcing that pre-launch operations are underway at its launchpad in Kodiak, Alaska. – ABL
  • The first Ariane 6 rocket is coming together. ArianeGroup showed photos of the rocket’s main and upper stages in final assembly. The rocket will then go vertical at the organization’s Kourou launchpad before its booster and fairing are added. – ArianeGroup
  • Blue Origin hiring for crewed spacecraft development, likely to further its previously revealed work to build an orbital-class vehicle that would fly on its New Glenn rocket. – Ars Technica
  • Texas approves land swap with SpaceX after the state’s Parks and Wildlife Commission voted unanimously in favor of the deal. Texas will give 43 acres of Boca Chica State Park to the company in exchange for 477 acres about 10 miles away near the Laguna Atascosa National Wildlife Refuge. – Chron

Industry maneuvers

  • Lockheed Martin would spend nearly $600 million in cash to buy Terran Orbital, according to a nonbinding proposal that disclosed the defense giant’s intent to acquire the company that specializes in building small satellite buses. – CNBC
  • Iridium is acquiring satellite timing and location service Satelles for $115 million by buying about 80% of the latter company’s shares that Iridium didn’t already own from previous investments. Satelles’ service effectively acts as an alternative to the U.S. government’s GPS satellites, and claims to be more powerful and accurate. Iridium expects Satelles to generate over $100 million in annual service revenue by 2030. – Iridium
  • Boeing awarded $440 million Space Force contract to build WGS-12 (Wideband Global Satellite Communications Space Vehicle 12), a communications satellite, for delivery by January 2029. – Department of Defense / Boeing
  • Thaicom orders satellite from Astranis, the startup’s 10th satellite ordered to date, for launch in 2025. – Thaicom
  • Viasat hires Rocket Lab for satellite communications demonstration: Under Viasat’s $80 million award from NASA’s Communications Services Project (CSP), the company selected Rocket Lab to produce a satellite bus and provide mission operations. The program aims to see if commercial satellite services can support NASA’s needs as the agency ends the Tracking and Data Relay Satellite System (TDRSS). The demo spacecraft is scheduled to launch in early 2026. – Viasat / Rocket Lab
  • Terran Orbital wins $15 million Air Force contract, “to supply Ambassador Class satellite platforms complete with solar arrays and support equipment to the Air Force Research Laboratory.” – Terran Orbital

Market movers

  • EchoStar discloses cash crunch in year-end results after Dish merger, disclosing it has “substantial doubt about its ability to continue” unless it raises more funding. But CEO Hamid Akhavan emphasized EchoStar’s plan to be cash flow positive in 2024, such as through $1 billion in expense cuts via post-merger “synergies and other cost measures.” – Via Satellite
  • Spire pulled in $105.7 million last year, revenue growth that was up 32% year over year, the company said in its Q4 report. The satellite company also chipped away at its annual net loss, which was $64 million in 2023, down from nearly $90 million in 2022. – Spire
  • MDA to join benchmark Canadian equity index, the S&P/TSX Composite Index which “includes the largest and most liquid publicly traded companies in Canada.” – MDA

Boldly going

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On the horizon

  • Mar. 10: Rocket Lab Electron launches Synspective satellites from New Zealand.
  • Mar. 10: SpaceX Falcon 9 launches Starlink satellites from California.
  • Mar. 10: SpaceX Falcon 9 launches Starlink satellites from Florida.
  • Mar. 13: SpaceX Falcon 9 launches Starlink satellites from Florida.
  • Mar. 14: SpaceX targets 3rd Starship test flight from Texas, pending regulatory approval.

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