Intelsat to Delta: We can support free inflight Internet model


Intelsat firmly believes it can support Delta Air Lines’ plan to offer free inflight Internet to passengers once its $400 million acquisition of Gogo’s commercial aviation unit is completed. More broadly, the satellite operator sees an opportunity to reset Gogo’s arrangements with airlines to bring far better economics to the equation, and ergo put serious wind in the sails of the global Ku IFC value proposition.

“We look at what Delta wants to do” in terms of free inflight browsing, said Intelsat SVP, mobility Mark Rasmussen, and “we think that is where a lot of airlines are going to go. I think Delta had a concern that there was not enough capacity to do it before, but this [acquisition of Gogo CA] changes that. This changes everything.

“We can now bring to bear all the resources of our fleet that are possible fairly quickly to help support what they want to do, and with owner economics and pure vertical integration, we absolutely plan to offer to airlines services that are really fast, and at economics that make it possible for them to offer free Wi-Fi if they choose.”

It won’t surprise readers to learn that Intelsat intends to work hard to hold onto as many Delta tails as possible, even as the US major considers its multi-source IFC options under a newly amended 2Ku agreement with Gogo. “Yes. In my own personal view and humble opinion, I think there is everything they need right here. That’s my view,” Rasmussen told Runway Girl Network.

Intelsat praises Ku3030

The ThinKom Solutions-made Falcon Ku3030 terminal, for which Gogo enjoys a level of exclusivity and branded as 2Ku, factored into Intelsat’s decision to acquire the CA unit.

“We have a lot of plans to invest in more capacity, ultra-high throughput satellites. We have a wave of those coming, starting in 2022, so we’ll go from hundreds of gigabits per second on orbit to thousands of gigabits per second on orbit and this will be in the Ku frequency band, so we like the terminal a lot because it supports our strategic direction there,” said Rasmussen.

The terminal is very good, we think. It brings a lot of capabilities. It is very, very efficient, I think the most efficient terminal in inflight connectivity today in terms of its ability to transfer megahertz into Mbps into useable throughput for an airline and so we like the terminal a lot.

The Gogo 2Ku solution can also talk to LEO satellite constellations. Having that option is a nice-to-have, though Intelsat has to see “how they develop”. But in the meantime, it is pushing “full speed ahead in deploying massive amounts” of Ku HTS GEO satellites.

Gogo’s work to secure linefit offerability for 2Ku at airframers also “big time” factored into Intelsat’s decision to acquire the CA unit, Rasmussen told RGN. “Almost every aircraft – if not every aircraft – will go off the line with inflight connectivity. You really need the relationships there with the OEMs…”


Benefits of layered capacity

One of the long-understood benefits of offering Ku-band connectivity is that there exists a patchwork quilt of Ku satellites around the world. So, in the unfortunate event that one satellite fails, there is redundancy for at least large swaths of that Ku quilt. If a new aircraft rolls out of the factory with a Ku IFC system, it can be deployed nearly anywhere in the world, an important consideration for aircraft lessors, which owned roughly half the world fleet even before the COVID-19 crisis spurred fresh sale-and-leaseback deals.

Being able to offer layered Ku coverage – as opposed to a single layer of satellite coverage – is key for Intelsat, said Rasmussen, noting that Intelsat has “over 40 orbital locations at which we can insert these ultra-high throughput satellites and continue to provide coverage to aero routes and hub cities and lay down more throughput”. As such, Intelsat is “uniquely able to deliver enormous amounts” of bandwidth to hub cities, whether Frankfurt or Dallas, said the Intelsat executive.

Next steps

Once the acquisition of Gogo CA is completed, expected early next year, Intelsat will “start out by running Gogo as a separate entity within Intelsat, but we’ll be working very closely with them right away to see how we can align their expertise and our resources as best we can for airlines. And I think that’s where the real excitement is for us and for airlines, frankly.”

What we’re doing here is combining probably the best terminal in aviation today and the best management network in aviation today with loads and loads of capacity that we have today, HTS capacity, that hasn’t really been deployed strategically to serve airlines because of the way the service has been structured in the past, with service companies leasing bandwidth and having a hard time doing that and paying for it and everything else.

So now we can bring owner economics to the airlines and the market segment, combined with Gogo’s capabilities and I think airlines will be in a really great place.

Has Intelsat determined how much of Gogo CA’s operations will be retained in terms of staffing levels, headquarter space, etc?

“No, we haven’t even started to work on that yet. We’re working on closing the transaction now,” said the Intelsat executive. “What we do know and believe that it’s an incredible amount of great talent and skill at Gogo, and we value [that] a lot and will continue to value a lot. So they’re bringing a new capability into Intelsat – quite a step function – and we’re going to make sure we leverage that as much as possible.”

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