Honeywell is in discussions with Inmarsat to become a Global Xpress service distribution partner, with the aim of distributing to the business aviation and government sectors.
But Honeywell “will not be distributing airtime services into the commercial air transport sector”, Global Xpress managing director Leo Mondale tells the APEX editor’s blog.
This is an important distinction as it means that Honeywell will not sell the actual Global Xpress aeronautical service to commercial airlines, as Gogo and OnAir have been cleared to do. And in fact Honeywell did not make a play to provide service to the commercial market in the first place.
Inmarsat and Honeywell yesterday announced that the latter firm has been selected to develop, produce and distribute onboard hardware to users of Inmarsat’s Ka-band satellite-powered Global Xpress service. The exclusive agreement is estimated to represent $2.8 billion for Honeywell in sales of hardware, customer service and maintenance to airlines, government entities and OEMs over the next two decades.
News of the deal did not come as a surprise to industry insiders, who were aware that Honeywell was in the pole position for the massive job, after talks between Inmarsat and Rockwell Collins broke down, as first reported here.
Explains Mondale: “Last August, we entered into an exclusive negotiating period based on a term sheet for Rockwell Collins to have [the] strategic partner role subject to contract. We weren’t able to get the closure on some material terms and the exclusive period expired. So, while we continued to talk to Rockwell, we obviously spoke to a few of the excellent bids we received in the process of that selection.
“Honeywell was very responsive to that; they had completed the EMS Technologies acquisition, which wasn’t the case early on, and things moved quickly. In a matter of weeks the transaction [was] on the table with Honeywell, [a firm that is] oriented to making a success out of broadband connectivity via satellite. It looked [like a] materially more attractive outcome than where we were with Rockwell so we went with the better choice.”
Mondale confirms that a Global Xpress distribution partner role for business aviation is “in contemplation” for Honeywell, and “we think government is an area as well”.
Honeywell VP of marketing and programme management Carl Esposito notes that the firm has “seen some nice examples” of government aircraft using today’s Inmarsat SwiftBroadband service, such as on C-130s, “and we see them looking at Ka-band in the future as well”.
Indeed, Honeywell believes that the network connectivity requirements of government users to “always be on” will drive an accelerated level of adoption of Global Xpress to meet critical mission requirements.
Honeywell expects to seal a service distribution agreement with Inmarsat “in the next couple of months”, says Esposito, adding: “We’re working through that right now.”
Meanwhile, Honeywell has “all the technical capabilities to do all of [the contracted] work in-house”, including developing, producing and distributing hardware to Global Xpress users, says Esposito. “With the acquisition of EMS Technolgoies about nine months ago, that really brings to Honeywell both the satcom terminal capabilities as well as the fuselage and tail mount antenna capabilities.”
He notes that the “well-timed” acquisition “is really paying off here in a big way”.
Global Xpress is scheduled for launch in 2013, with global service for commercial, business aviation, and government customers available in 2014.
IFE giant Panasonic Avionics, meanwhile, currently offers a Ku-band-supported connectivity service to airlines, and is looking to also operate via a next generation global Ku-band network by 2015.
Whilst Inmarsat’s lengthy and ultimately fruitless talks with Rockwell Collins “certainly used up some schedule margin”, says Mondale, Inmarsat feels “very comfortable” with the timeframe for deploying its network.
The London-headquartered firm recently completed a periodic review with Boeing, which is supplying the three Inmarsat-5 Ka-band satellites that will support Global Xpress.
By end of 2014, it expects to have a a “practically global service”, covering virtually all commercial routes except for the poles.
Referring to rollout of Global Xpress, OnAir CEO Ian Dawkins recently told the APEX editor’s blog: “For me, it’s exactly on programme.”
April 18, 2012
IFEC