In-flight mobile services not profitable

A new report from TMF: "The Market for In-Flight Passenger Communications: Lessons from Connexion," predicts that the deployment of in-flight cellular services could be limited. Compelling ROI (return on investments) should be difficult to demonstrate. They believe in-flight mobile calling will remain a premium-priced service, targeted primarily at the limited number of First Class and frequent business travelers. Low usage, leading to insufficient revenues per equipped plane, results in airlines having to subsidize the cost of equipment. After the failure of Connexion by Boeing (the unit was recently closed), high-end services such as OnAir and AeroMobile, using Inmarsat satellite equipment, should have difficulties to to generate much higher end-user revenues than the $100,000 per plane achieved by Connexion. Terrestrially based Air-To-Ground (ATG) systems, however, such as that low-end one planned by AirCell in the US, are expected to break even much more rapidly. As a consequence, in-flight Internet access may be easier for US airlines to justify.