MENLO PARK, Calif., Sept. 29 /PRNewswire/ -- A new report from Telecom, Media and Finance Associates, Inc. (TMF Associates), "The Market for In-Flight Passenger Communications: Lessons from Connexion," forecasts that widespread deployment of in-flight cellular services could be limited to those airlines who can justify investment in passenger connectivity as a service differentiator, since many airlines may be unable to demonstrate a compelling direct return on investment in these services. While rapid deployment of in-flight cellular could produce annual end-user revenues of more than $600M from 4500 equipped planes by 2016, a failure to generate sufficient ROI for airlines may result in revenues of less than $200M from under 1800 equipped planes. Tim Farrar, author of the report, commented, "A key lesson from the failure of the Connexion-by-Boeing system was that low usage, leading to insufficient revenue per equipped aircraft, results in airlines having to subsidize the cost of equipment. We estimate that the in-flight cellular services offered by OnAir and AeroMobile, using Inmarsat satellite equipment, will need to generate much higher end-user revenues than the $100,000 per plane achieved by Connexion before the service reaches breakeven for airlines on a standalone basis. Only then will it start to become attractive to low- cost carriers. This represents a challenging objective since in-flight cellular calling will remain a premium-priced service, targeted primarily at the limited number of frequent business travelers who need to remain constantly in touch. However, terrestrially based Air-To-Ground (ATG) systems, such as that planned by AirCell in the US, are expected to use lighter, cheaper equipment and thus may be profitable at much lower levels of end-user revenue. As a result, widespread deployment of in-flight Internet access may be easier for US airlines to justify." The report provides airlines, equipment manufacturers, service providers and analysts with a comprehensive re-evaluation of the in-flight passenger connectivity market and the lessons from the failure of Connexion-by-Boeing. It discusses proposed connectivity services and the views of airlines, passengers and regulators, and analyzes the business air traveler market in detail, including spending on comparable existing services. The report examines rapid and slow deployment scenarios for in-flight connectivity, analyzes the key factors that will determine which scenario is realized, and provides ten-year market forecasts of deployment and revenues for in-flight cellular and Internet access services by region of the world and passenger type. Conclusions are drawn about the size of the opportunity and the implications for airlines, passengers and service providers. For more information about the report, see http://www.tmfassociates.com/aero. TMF Associates, headquartered in Menlo Park, California, is a leading consulting and research firm providing business and technical analysis in satellite, wireless and broadband telecommunications. The firm specializes in Mobile Satellite Services, including Ancillary Terrestrial Component (ATC) technology, and works with operators, investors and equipment manufacturers to analyze complex market issues. For additional information, please visit http://www.tmfassociates.com. CONTACT: Tim Farrar, President Telecom, Media and Finance Associates, Inc. 650-839-0376 or email@example.com This release was issued through eReleases(TM). For more information, visit http://www.ereleases.com.
SOURCE Telecom, Media and Finance Associates, Inc.