European Space Agency

Cost Benefit analysis for “non-safety” satellite based aeronautical services


Airborne connectivity is becoming an important subject, capable of providing service differentiation and/or revenue generation for airlines, according to their business model. Following the demise of Connexion by Boeing (CBB) a number of companies have entered the market but a comparison with CBB is difficult due the varying claims that each is making. The result is a highly confusing picture for a potential customer, particularly under the current economic climate.

While the main airframe manufacturers remain optimistic on medium term sales, many industry analysts expect a growing probability that by the end of this year new aircraft may be coming off the production lines quicker than the market can absorb or pay for them. Last year’s fuel crisis has already contributed to the insolence of many struggling aircraft operators but the banking crisis had an even bigger impact. The difficulty to arrange finance continues to throttle growth in all aviation sectors over the coming months. Thus, the economic downturn is likely to reduce the number of immediate aerosatcom projects and to greatly affect their prospects for some time to come.

The main objective and scope of the study is to assess the commercial and technical feasibility of a number of non-safety (i.e. APC and AAC) aeronautical communication solutions and business models in order to identify the commercial viability and technical feasibility of current and emerging connectivity solutions for the Air Transport, Business Aviation and Government market segments.

Cost/Benefit evaluation criteria are:

  • Type of services (Talk/Connect/View),
  • Existing or required time to market,
  • Price that customers are willing to pay,
  • Cost that allows the business model to work for shorthaul & longhaul and across the three aviation market segments,
  • Low-risk service provision arrangements,
  • Industry Standards compliance and regulatory licences availability,
  • Global coverage,
  • With future-proof product evolution characteristics.

As many business analyses and market estimations have shown, the demand for in-flight satcom connectivity is attractive. Nevertheless the number of failed attempts to realise this opportunity is a concern. Additionally, the business environment and the infrastructure of the traditional service provider are undergoing a fundamental transition to a multi-service, multi-system business, converging on a mobile IP network architecture. Finally, despite the current gloom surrounding airline profits and passenger numbers, most industry analysts expect growth to return at some point – potentially leading to satellite network capacity issues.

As such, the project was focused on delivering guidance for an assessment of the success chances of current and emerging aerosatcom solutions and offerings, their key success indicators and their critical challenges. The project objective was to generate data and information with direct relevance for:

  • Service take-up, terminals equipment fitted to date and volume of traffic generated,
  • Evolutionary trends that will affect the devolvement of future non-safety aero-services,
  • Identification of possible business scenarios that may have promising commercialisation prospects, taking into account:
    • Aircraft types and quantities operating on SH or LH routes in Europe or in any other region of world,
    • Private aircraft and business jet market operators,
    • Number of new aircraft fitted over short, medium, long term,
    • CSP offering services in collaboration with satellite and terrestrial mobile operators.

The Business Analysis and the associated Business Cases addressed:

  • OPEX
  • Revenue Potential – overall and per aircraft type
  • Value chain models
  • Investment required/Cost Profile
  • Cash Flow and Payback Profile


As with any other prospective study, the key issue was the identification and sufficiently detailed definition of realistic scenarios and their parameters for the future. For this study this specifically meant to identify and investigate:

  • Technology trends with obvious or prospective implications for the commercial situation of potential future aerosatcom systems,
  • Standards and regulatory developments that may significantly constrain future aerosatcom developments but could also create new opportunities,
  • Emerging services and their models with high and sustainable revenue potential for future non-safety aeronautical satellite systems,
  • Relevant future aerosatcom market segments in the APC and AAC domains, including elaboration of respective mapping of relevant applications and services to these identified market segments.

To fulfil these tasks, the study team could rely on a large network of experts from various aviations sectors and on experience gained in past and current aerosatcom related research projects, such as WirelessCabin, MOWGLY, ANASTASIA, NEWSKY and SANDRA.


The main outputs of this study are:

  • Development of a flexible methodology and respective tools for the cost benefit analysis for “non-safety” satellite based aeronautical services, allowing the meaningful revenue estimations including forecasts over short/medium/long-term time periods, based on appropriate pricing models.
  • Identification and detailed analysis of market segments in which aerosatcom could be considered as economically viable solutions for non-safety aeronautical communication services, possibly including identification of technology gaps, regulators issues, etc. identified in WP2 to be overcome.




The study is structured into 4 main work packages:

  • WP1: Review of Current Aerosatcom Systems
    The objective of this WP is to identify current and evolving commercial aerosatcom systems, their business model, incl. services & usage characteristics with the objective to identify the relevant market potential, operating constraints, and financial key performance indicators.
  • WP2: Evolutionary Trends
    The objective of this WP is to review evolutionary trends in technology, standards development, regulatory issues and value chain, and consequently identify and derive important indications and drivers for high-potential business scenarios.
  • WP3: Market Definition
    The objective of this WP is to elaborate a systematic market definition for non-safety aerosatcom services over the short, medium and long term (5, 10, and 15 years), providing down-selected appealing market segments as well as fundamental revenue projection methodologies and tools.
  • WP4/4.1: Business Case Definitions and Analyses
    The objective of this WP is to determine if, to which degree, and in which market segments aerosatcom could be considered as economically viable solutions for non-safety aeronautical communication services. The outputs of the work package are aimed at airspace users, AMSS providers and avionics system developers to provide the relevant economic and credibility criteria for ascertaining the commercial viability of non-safety AMSS solutions.

A main element of the study was an Expert Input Workshop, held shortly after project kickoff to ensure that a wider user & expert view and experience regarding both technical and commercial aspects of the aerosatcom domain is taken into account in the study.

The study objectives were extended in a CCN to additionally cover the following areas of investigation:

  • UAS Payload Communications Technology Characteristics and Market Assessment “for non-safety” Aerosatcom,
  • Single Pilot Cruise Concept and Single Pilot Cockpit Technical and Commercial Satellite Communication Market Assessment.

Current status

The project was started on Oct 1st 2009 and concluded in Sept 2011, with the CCN covering the period from May to Sept 2011.

Status date

Thursday, December 22, 2011 - 14:53