Aircraft Connectivity – What Now; What Next?

Tony Kioussis (00:33):

Welcome to another Asset Insights podcast covering the aircraft ownership life cycle. I am Tony Kioussis, president of Asset Insight, and your host. Satcom Direct was established in 1997 to advance the technology of connectivity. Since then the company has delivered numerous advancements and capabilities from simplified calling to an aircraft in flight, to making smartphones ring and computers operate with the same reliability and speed in the air as on the ground anywhere in the world. The company’s next generation of services helps synchronize the aircraft with the flight department and connect the entire flight operation. Jared Maynard is Senior Program Manager Gulfstream, and Pre-owned Aircraft Programs for Satcom Direct, and he joins me today to discuss aircraft connectivity. Welcome Jared. And just to place your comments into perspective, perhaps you can describe what you do and who you work with.

Jared Maynard (01:35):

At SD, I wear several different hats. So first, as you said, in my title, I manage our Gulfstream OEM program from both a hardware and a software perspective. So as a supplier, I had the opportunity to interact with a lot of wide range of individuals from production to completions, procurement and contracts engineering, even after market services. I’m also type rated in our Gulfstream, so I get the opportunity to fly from time to time and help with R&D testing, customer demos, et cetera. And then I’d say more specific to this podcast and this audience, I manage our pre-owned aircraft program. So in this role, I provide conductivity, technical services, different information to appraisers brokers, lenders, aircraft owners, and various other businesses and consultants that are involved in pre-own aircraft, aircraft transactions, et cetera.

Tony Kioussis (02:25):

Terrific. So aircraft connectivity, it’s a very broad topic. Could you start by explaining it from a first-time aircraft buyer’s perspective?

Jared Maynard (02:35):

So from our aircraft buyer’s perspective, I’d say first-time buyers, when they hear connectivity a lot of folks who deal with they go right directly to Wi-Fi and think that, but there’s also a lot of others. They’re correct in that Wi-Fi is part of it, but they should also consider different systems as well, as the first time buyer. So I like to break it down into four categories the first I always start with data-link kind of up in the front of the plane. And there’s a lot of different things that provides. It’ll provide flight deck messaging, you can get flight plans on it. There’s a number of new ATC functions, something that they’ll hear called CPDLC. And then you can also get weather information on that, whether it’s on displays upfront or asking for meter powers or forecasts and different things through the system as well.

Jared Maynard (03:16):

That goes through a variety of different paths. So one’s going to be VHF radio, and those are ground-based networks all around the world. And then there’s also two different networks that can provide that over satellite. So you usually see multiple different networks within that airplane that are all connected up front to that flight deck.

Jared Maynard (03:32):

Second, I’d say another good thing for them to consider is voice communications. Obviously, there’s satellite voice, which we’re very well aware of. Those are usually plumbed inside the aircraft to some kind of handsets on them. And they could go through a variety of different networks or over some of the more faster networks through voice over IP, but there’s usually handsets associated with them. And then I’d say more popular nowadays on the voice side, we used to see a lot of minutes through those satellite systems, but they’ve very quickly dropped off and we’ve seen a huge increase in the amount of Wi-Fi calling.

Jared Maynard (04:06):

So that’s using your own personal electronic devices, your Android, you iPhones, and they’re using that Wi-Fi path as the path to get out and talk. So we see a lot of people bringing their own devices, their phones on, and then just using that as their primary means of communications versus using a telephone. Obviously, there’s internet, and there’s a lot of different flavors of that on the aircraft. So you have air-to-ground networks, primarily Gogo here in the US there’s a number of different satellite networks. And I kind of like to have them think of that based on the types of antennas. So we have fuselage mounted antennas, something like a SwiftBoradband, which is up on the top of the aircraft. And then on some of the larger aircraft, you’ll have Tram antennas and those could be in what they call L-band, Ku, Ka, multiple different frequencies.

Jared Maynard (04:52):

You’ll hear a lot of letters, but those are just really similar to frequency bands, same maybe AM / FM radio. Those are satellite frequencies that those systems operate in. And then, although it’s not internet, another one of those satellite systems that we like to bulk into there is satellite TV. So we still see quite a bit of those. Although they’re quickly transitioning over, a lot of the more capable, faster, new satellite systems have the ability to stream. And we’re seeing a lot of cord cutters at home, and that behavior is moving quickly into aircraft as well. There’s definitely still some that you satellite TV, but a lot of them we’re seeing instead of paying for that system, they’re electing to have a faster satellite system and then just stream through that or stream through, say an air to ground system as well.

Jared Maynard (05:36):

And then the fourth I’d say is ground systems. And what I mean by that is, as connectivity has become more prevalent, there’s been a lot of focus transitioned towards what can I do with connectivity. So think of at your house where for a while, it was I had dial-up internet. And then it eventually transitioned to maybe DSL or something like that. And then eventually to a cable or a fiber with very fast speeds and a lot of capabilities. As that conductivity became more capable, then in our house, we, started transitioning away from the fact that we just had internet, into what can we do with it? I can unlock doors, I can turn on and off lights, I can stream videos, we have home automation, all kinds of different things. So as those things are connected, that same kind of approach has come into the aircraft realm.

Jared Maynard (06:22):

So we’re, seeing things like digital maintenance systems, electronic records, system and health monitoring and recording, Volk one data, safety management, task automation. The idea that, okay, my plane can talk now, how can I reduce all these manual processes, be more productive, have less people to be able to support that, et cetera. So there’s a lot of value there. I would say those are the four things.

Tony Kioussis (06:45):

With respect to aircraft connectivity, does an aircraft size or its options play a role?

Jared Maynard (06:51):

Definitely. So that’s another thing that comes into play a lot when talking with different clients, the size and the type have a big impact because it directly influences which options are available. So I could use basically the extreme ends of the spectrum. So let’s say we have a Phenom, you might have one or two options depending where you fly, maybe say, Gogo in the US or SwiftBroadband internationally. And then if we go to the other side, say maybe like a large Gulfstream, you can fit as many as three antennas in that tail alone. So you might have Swiftbroadband and you could have a Ku satellite system, a Ka satellite system, satellite TV, and air-to-ground system. So the larger the aircraft, usually you have a lot more different options, but sometimes these are the options are limited for different sizes and types of aircraft.

Jared Maynard (07:38):

So just because you have a large jet with a lot of room, doesn’t necessarily mean that you could have any different option because they’re usually limited to the lack of business cases. So market sizes, budgets, all those must be considered. And then when they’re only a small number of the potential aircraft that you’re flying, the return on investment might not be there. So those companies will probably not elect, or they won’t be able to adequately justify the cost of developing that STC. So, that’s another thing to consider is it’s not just necessarily the size, but also what’s available from a business case. Tends to have a smaller number of production units on some more rare aircraft, or usually a lot of the older aircraft will have limited options as well. As far as performance and limitations.

Jared Maynard (08:23):

When you’re shopping for first aircraft I’d say, it’s really important to realize that blazing fast conductivity, those different options are not available for every aircraft in every location. So like the Phenom, I just mentioned, that’s a good example. Users’ experiences in the US with that would be a lot different than say Asia or the Middle East due to the type of networks that are available and what systems they can have on there. So as a new buyer, I’d, say you’d need to be really careful and set your expectations accordingly upfront, or there is a potential that you could be disappointed in the future.

Tony Kioussis (08:55):

Okay, so with respect to an aircraft acquisition and say the more seasoned operators, what suggestions do you have for our listeners regarding conductivity upgrades?

Jared Maynard (09:06):

So the majority of my conversations with this group usually starts the same way. Most people tend to jump right into the price, but I’d caution against this. I found that most wealthy individuals, large corporations, they’re not necessarily looking for the cheapest solution. Instead, they crave information that allows them to compare options, make their own conclusions, and ultimately be confident that they selected the best solution. So in many cases, jet owners, they can afford anything they want. So I like to look at many different factors when I help different clients.

Jared Maynard (09:40):

So one part of that I like to start with always is defining the mission. So that’s questions, like what kind of aircraft do we have or are we looking at, what are the lengths of my flights? You can tolerate an hour without conductivity, but 10 or 12 hours is completely different. Number of passengers, what kind of equipment do I have on board, and what do I want to use? We see focusing, I want to use my Apple TV, my Roku, I have x-amount of personal electronic devices, iPads, cell phones, et cetera. Some of them have pretty sophisticated cabin management systems and displays throughout the aircraft. So those come into factor as well. So all those I would say are good questions to start kind of defining their mission.

Jared Maynard (10:23):

From there, then I like to kind of move into coverage. So what are my routes of flight? Some gotchas, for instance, are maybe polar routes. We’ve seen some of those on longer range aircraft now where there’s different coverage in different places. So that would have to do with say maybe Data Link Communications or make sure that you have say an Iridium system that provides coverage over the poles. Also, take into consideration your mix of flights. Am I domestic, am I international, what’s the percentage of those, do I have any unique connectivity requirements based on where I’m flying and then also country considerations. So we’ll see some limitations on what’s available and what people can use say in China, and Russia, and India, there are certain things like that, that they would want to consider. And some of them are even linked to where the aircraft will ultimately be registered.

Jared Maynard (11:13):

Then there’s performance expectations. So a lot of these questions I like to say, are what does the passenger want to do? Is it they want to stream, they’re just going to do email, they want to trade stocks, and game, and all kinds of different things. The next question I always end up asking is what do they need to do? Because wants and needs are sometimes very different. And then also will help you give more solutions to the end user and allow them to say, “okay, well I want this, but it’s a lot of money or I need this and it’s this much”. And then they’re more informed and they can say, “is it really worth it to them”?

Jared Maynard (11:47):

I also like to tell them, think about not only the passengers, but how many devices each them have. So what we’re finding is the number of devices that are connecting to an aircraft has continued to increase, and now it’s increasing quite rapidly. For instance, you might have a watch that’s enabled, then you have a work phone, then you have a home phone, then you have a iPad and then you have a work computer, and so it just starts adding in. So it might be one person, but it might be three, four, or five devices for each one of those. And then those are all using data. And that all impacts how you use and what networks you want to choose.

Jared Maynard (12:24):

Another thing that I like to ask is what do they use at home? So what we find is the behavior on the aircraft usually mimics closely what they use at home. Do they like to watch Netflix? Are they watching sports or live TV? Do they have a specific device at home that they like to use? What do they use at work? Are there specific applications, programs, systems, and things like that, that they use. And then also do they have any unique IT requirements, security requirements, things like that. Those are all good questions from a performance and expectation side that you want to ask, so you can kind of put those together in a list and make sure that you weigh the pros and cons of each one of those options. Redundancy comes up a lot too, network redundancy. How bad do they need the internet? And if it doesn’t work, do they need a backup? So this might involve multiple different satellite networks on an aircraft, maybe a satellite in an air-to-ground network, things like that.

Jared Maynard (13:16):

We even see on some of the larger aircraft where they’re going into equipment redundancy, where there’s multiple routers that have automatic fail over self-healing networks, redundant wiring throughout aircraft, some very sophisticated networks so that if one thing fails, it can fail over to something else, and everything keeps running. Obviously cost is a factor. So what’s your budget? As you start diving into different options, how much is X worth to you? How much is streaming worth to you? How much is just e-mailing worth to you? How much is a satellite phone worth to you? Things like that, and what you’ll get back and the expectations in the marketplace, and based on what they’ve had before, it kind of ranges widely.

Jared Maynard (13:58):

And so cost is always a consideration, but those are good things to kind of say, okay, what are my expectations that I’m up against? And what range are they in? And is it even in the ballpark for what they’re trying to do as far as the costs for the service and the equipment. Another one is value adds and support. So I would say, what level of support do they expect? Do they need guaranteed response time? Some providers have service level agreements. Are there other systems that they want to connect and interface to? That’s always a good question.

Jared Maynard (14:29):

So we’ll see a lot more integration between different networks and systems and ground side, we’ll call them devices. It’s good to ask them what they use, scheduling software flight planning. What do you use for maintenance tracking? Do you have any fuel programs, electronic flight bags, apps, things like that. So you want to get a good feel for all of those different parts and then see what systems and networks and pieces can support that. Cause a lot of them do work together and then that creates a lot of efficiencies and definitely crew flight departments, maintenance folks makes their times a lot easier.

Jared Maynard (15:02):

And then I also always like kind of follow up with future requirements. So a lot of time when I’m sitting down and working with different folks or they’re going to present to the board, et cetera, we’ll say what’s the potential for a corporate expansion? Is there a potential that when you own this aircraft over the next three to five years, say maybe that there’ll be international offices that are opening up maybe new markets. You want to expand to Africa or South America or an Asian market, et cetera. And that kind of changes their scope, not only necessarily for the aircraft, but it had also drastically changed their connectivity.

Jared Maynard (15:36):

Another thing that I’ve seen is upgrading or downgrading aircraft. So that’s another good question is, do you have any plans of getting a larger aircraft potentially or a smaller one? And that not only has to do with what you’re putting on as far as maybe your upfront investment and then the potential resale value of that, but then also what are you having on this aircraft versus another aircraft? If you have a highly capable, larger craft with a really fast system, and then you go to a smaller aircraft with less options, sometimes that’s worth considering as well.

Tony Kioussis (16:07):

A little while ago, you spoke about future requirements. So let me ask you, regarding the future, what can you share about new conductivity systems and networks and development?

Jared Maynard (16:20):

So there’s several new networks that are in the works right now. One of them that was just recently introduced was a Viasat, they have a new Ka network. SES has a network called LuxStream. Intelsat has a network called FlexExact, and then Iridium has a new network later next year, called Certus. So quite a bit of new options that are coming out as far as networks. And there’s a lot of network expansion as well. So we see Immarsat on their, a Global Xpress constellation. They’ve launched another satellite and they have plans to launch a bunch more in the near future. Same thing with ViaSat on Ka. They have plans to launch several more satellites and then they’ll go has a fifth generation air to ground network in the US and the works as well.

Jared Maynard (17:03):

New equipment, so obviously we’ve made some announcements for plain simple at SD that’s our new antenna systems. There will be multiple different variants of it, but end of this year, we’re rapidly approaching commercial introduction for a Ku system, a Ku variant of a tail mount antenna, this year. Some other hot topics I’ve seen is, your LEO networks or what they call, low earth orbit. Probably the most widely talked about is Starlink and being down here in Melbourne, we’re pretty close to home. We’re seeing the Munn’s rockets go up all the time. You’ll have OneWeb telesat some of those others, and then obviously a lot more performance with a lot of these different networks, not only in the networks that we see now and as they add and launch different capacity, but in the future networks that they’re looking to unroll too. So things are getting much, much faster. The cost per bit is getting cheaper. And then obviously there’s probably going to be some intense competition with all these different options available. So that’s always good on the consumer side too, is that price competition is always a good thing for them as well.

Tony Kioussis (18:04):

Can you explain for the average person what the difference is between Ka and Ku band?

Jared Maynard (18:12):

So for the average person, I would say very little, the only real difference with them is frequency ranges. And that has some, we’ll say some relation to the efficiency of the way that it can move that data back and forth. But to the average person, there’s really not a lot of differences. They’re both geostationary networks, meaning that the satellites are parked up over the equator. They both utilize tail mount antennas right now for business aircraft, meaning that there’s like a dish system up in the tail that it uses to communicate back and forth with that system. Latency, meaning that the delay between when you send it and bounces up to the satellite down to the ground are very similar between both of those. The way that I recommended is not to necessarily look at one specific frequency band versus another, but more importantly, look at the network and the capabilities of that network.

Jared Maynard (19:06):

So regardless of that frequency band, they’ll each say there’s specific throughput, specific coverage, specific performance, and even specific pricing in ways of pricing that service that I would say is definitely more important in comparison. So you could have any of those different networks that are very capable as far as performance, and speeds, and cost. So if you can afford anything that you want, then it’s usually more important looking at all the details and saying, okay, what do I really want? What’s that mission? And then comparing the pros and cons of each, but rarely do I ever find anyone that’s fixated on a specific frequency band or type they’re more looking at the bigger picture of that network and what can it provide, and what are the costs associated with it?

Tony Kioussis (19:50):

Let me ask you another question with respect to cost. If I say, have a 20 year old airplane? Does it make sense from a financial perspective to try to connect so that I can have internet connectivity?

Jared Maynard (20:05):

That’s a very loaded question. So there’s a lot of different ways to look at it. I would say that as you get older and aircraft and the whole values go down, the costs and consideration of those upgrades are always much more important. So as a general rule of thumb, obviously as my aircraft ages and it gets older and it’s worth less my appetite for a very expensive system to add into that decreases as well. So that’s basic human nature and there’s not a real way around it, but then what we find drives those decisions is not necessarily specifically dollars and cents. From that perspective, I find that there’s a lot of other behind-the-scenes factors that influence that buying decision that you really want to focus on more. So for instance, if connectivity is very important to that one or that company, or whoever’s in the back then their appetite for a little bit more costly system or for more capabilities or better coverage tends to be more.

Jared Maynard (21:04):

So for instance, if I had an older aircraft say maybe a G4 or a G5, and I really find the internet is important, then they might see a larger value in that system and be willing to put out more for say a top of the line, latest, greatest kind of system. Another thing that I see a lot more is that in the charter environment, it’s almost become a basic requirement and that without internet, they are less marketable for that aircraft or that charter. So I’ve seen a lot of cases there that even though it’s an older aircraft and it’s a lot of money with respect to that whole value, they still elect to install connectivity because of the competitive nature and that expectation in the marketplace. And then there’s other ways that they can get creative with that with a different, we call it sky ticket, but they’re basically credit card billing systems or different ways, very similar to like say an airline method where you can pass certain costs or lower the risk of certain overages and things and in different areas with that.

Jared Maynard (22:01):

So yes and no. The other thing that you have to look at that on the appraiser side, I usually talk a lot with is that the sands are shifting as far as capabilities are concerned. So a lot of times they’ve been coming and saying, ” Hey, Jared, can you look up, or do we have any data on how the fleets are equipped and what they’re equipped with?”. And many cases, the systems may be very expensive, but once you reach a certain critical mass within a fleet, it almost becomes standard on that. And then it becomes a deduct if you don’t have it, versus everybody traditionally thought that you would add to the value with the satellite system.

Jared Maynard (22:34):

So, G650s, are a great example, more than half the fleet has these high-speed systems. So if you didn’t have a Caveman system on there, it’s actually a deduct versus adding on. So, even when you put it in, it’s not necessarily going to make your plane worth a whole lot more money, but it’s starting to become a baseline. So, we saw that before with swift broadband and some of these other systems on large, long range aircraft. And now we’re starting to see the same thing with Caveman systems.

Tony Kioussis (23:02):

Let me ask you a question from a slightly different perspective, perhaps, and I’m not trying to pick on any one aircraft make, model, type. I’m just trying to go for the size of the aircraft, but say an aircraft, the size and age of say a G100, or a G150, or even a G200, is there a great deal of conductivity that can be applied to an aircraft like that? Both from a technology and from a financial perspective?

Jared Maynard (23:30):

Not really. So if we look at airplanes at that, we’ll call them vintage size, caliber, et cetera. There’s a number of different things in play. So obviously one is going to be the physical limitations of whatever those systems are. So something like that, we just don’t have the real estate in the tail to put a big antenna. So then we’re limited with we’ll call them fuselage mount options. So smaller antennas, streamlined surf boards, if you may, that are on the top of the aircraft or maybe, air to ground antennas that are on the bottom of that aircraft. So that limits quite dramatically, some of your options, and then also some of your coverage, and speeds, and performance.

Jared Maynard (24:09):

Secondly, every one of these systems is a business decision and in some ways the dance for all these different companies. So they’re looking at the costs of the different networks. They’re looking at the business cases for each of them. How many aircraft are there? How many do you think would actually buy it? What are the price points that they would buy that at? What’s their budgets per month? Where are they flying? And what are those values and things? So there’s a lot of those that all come together, and then the output is do they end up using that as a platform or not? So I would say that also limits some of these different aircraft as you move down the ladder, because they just can’t make a business sense for the amount of costs and development and everything that’s into it.

Jared Maynard (24:50):

It’s really complex and very expensive to design a lot of these systems. I like to say, it’s like, you’re out on a boat and you have some binoculars, and you’re trying to look at something on the shore. Now think about that on an airplane. But those binoculars that they’re using as the dish and the tail, and they’re looking 20,000 miles away. So I can’t even look at something on the shore with the binoculars on a boat, let alone having something like this, shoot this data back and forth thousands of miles. So, it’s complex, it’s expensive , there’s a lot of moving parts. And so all that has to be added up when they’re saying, does this make business sense? Can we make money? And is the return on investment there? So that’s where the playing field kind of goes down as you move down market.

Tony Kioussis (25:31):

Well, what changes have you seen in the marketplace as a result of the COVID-19 pandemic? And do you feel that any of these changes are likely to be long lasting?

Jared Maynard (25:42):

Good Question. So this has been coming up a lot, especially as it’s kind of starting to wane down and things are starting to open back up again. And I would say the majority of them are really focused on what we see as market performance and how do we see things behaving? So what I can say is that obviously there was, there was the downturn last year and we see a dramatic drop in usage across the board, and then it’s been slowly gaining.

Jared Maynard (26:10):

So if we look at now, which is basically a year after everything has kind of fallen, I would say we’ve recovered back just about to where we were before. And then I also like to mention that there’s still not a lot of international travel and that certainly hasn’t recovered. So I think we’re domestically or within certain regions, at least internet usage is up. So we’re about even. And I think that once we start seeing international flights and a lot of that long range travel and these different regions starting to open up to each other, I think we’ll probably exceed where we were last year. So we’re not doing bad. We’re not doing good. You’ve definitely recovered as far as usage and things are concerned. But I know at SD, we’re definitely looking forward to when international travel starts opening up and we’re anticipating some additional spikes in usage from that.

Tony Kioussis (27:00):

Thanks, Jared. I’ve certainly learned a few things today. Is there anything else you would want people to know about Satcom Direct Services?

Jared Maynard (27:08):

If anyone wants more information, feel free to visit satcomdirect.com. There’s a whole bunch of information on there about our company, about the products and services that we list. And then obviously through this podcast, you’ll have information how to reach me. If anybody has any questions, I’d be happy to help with them.

Tony Kioussis (27:25):

This has been another Asset Insight podcast covering the aircraft ownership life cycle. Please visit our ever-growing podcast library at assetinsightpodcast.com, and select from any number of topics discussed with business aviation industry experts. This is Tony Kioussis, and as always, thank you for listening.