Thales considers options for investing in the service side of inflight connectivity market

Becoming an inflight connectivity service provider might not be on Thales’ immediate agenda, but the company – which identifies as a systems and solutions specialist – is not ruling out eventual growth in this area.

“We are interested, continue to follow, and could make investment on the service side, but it remains be seen,” says Alan Pellegrini, CEO for Thales’ inflight entertainment (IFE) and communications business. “Our priority right now is the systems, but with services on the horizon.”

Thales’ TopConnect suite of connectivity solutions combines Thales’ TopFlight satcom with core avionics to provide cockpit voice and data, and passenger mobile phone and Internet service. TopConnect supports Inmarsat’s L-band-based SwiftBroadband aeronautical (SBB) service, but it will also support Inmarsat’s forthcoming Ka-band service, Global Xpress, which boasts far faster speeds.

Qatar Airways’ new Boeing 787 – which debuted at the Farnborough air show and is expected to be delivered to the carrier within weeks – is rolling out with connectivity that “makes use of TopConnect onboard Wi-Fi and GSM networks and communications server” via SwiftBroadband. Qatar says voice calls will be deactivated because passengers do not want to be disturbed by the chatter of fellow passengers.

OnAir acts as the service provider to Qatar, and in fact there are now “four customers we’re providing turnkey systems for and in each case OnAir is the service provider and we are the systems provider”, says Pellegrini.

Technically, there is no reason why TopConnect can’t support a Ku-band satcom, says Pellegrini, and Thales “wouldn’t rule it out entirely”, but the company continues to see “a healthy market for SBB” and believes airlines will offer Global Xpress when they take delivery of aircraft fitted for Ka in the 2015 timeframe. “So an interim Ku solution does not make sense to us. It would be such a short window it’s hard to figure out how to realize a return on that investment.”

He adds that Thales has “confidence in what we’ve been briefed by Inmarsat and others involved” that Global Xpress will be globally available in 2015.

If Thales were to formally make the leap to the service side, it would face competition from its archrival in the inflight entertainment hardware space, Panasonic Avionics, which acts as both systems and service provider for its Ku-band satellite-supported connectivity solution, eXConnect.

Forging closer ties with OnAir might seem like a logical next step for Thales to some industry observers. After all, Inmarsat has picked OnAir and Gogo as Global Xpress service distribution providers. All three firms – OnAir, Gogo and Panasonic – are currently competing for inflight connectivity business with major international airlines.

Whatever road Thales takes, Pellegrini is adamant that “systems and service should not be one in the same. If we try to be entirely turnkey without offering flexibility on the service side, it could compromise what we’re doing on the systems side.”