ViaSat’s Bill Sullivan on Lufthansa’s shift

I had a good chat with ViaSat strategy director Bill Sullivan yesterday evening. We talked about the company’s strategy to bring Ku-band and Ka-band connectivity to airlines, either directly or through partnerships. Be sure to keep an eye on Flight Global’s new IFE&C channel for an article about that later today. But I also talked to Bill about Lufthansa’s decision to cease negotiations with T-Mobile and ViaSat, and turn to Panasonic Avionics to reignite connectivity on its overseas flights.

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For obvious reasons Bill had to be a bit cautious when discussing the subject of Lufthansa. But here he is in his own words.

“One of the things to point out is the airlines have a comfort level when it comes to purchasing cabin avionics with known players in the industry and while T-Mobile is obviously a world-class company and communications service provider, they don’t really have a history in the provision of cabin avionics for airlines. It was an interesting test [the pursuit of Lufthansa]. I don’t believe the deal is done between Panasonic and Lufthansa but as I understand it, they now have the position we once enjoyed, exclusive negotiations status.

“So, it was a good test [in whether] an airline would purchase cabin avionics from a non-traditional player. We’ve seen the case where Southwest Airlines is purchasing it from Row 44. Row 44 is an upstart. They are aviation people but they don’t have a long history of providing cabin avionics. But Lufthansa has been leaning back towards the cabin avionics supplier they are more comfortable with. Clearly Panasonic has a very large portfolio [and I'm] sure they could make very aggressive offers. They have the pockets in terms of…doing a lot of things for a lot of airlines. [They] have a lot more flexibility in the kinds of deals they can make with an airline.”

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3 Responses to ViaSat’s Bill Sullivan on Lufthansa’s shift

  1. Ludwig von Hapsburg XII "Stinky" June 26, 2009 at 11:52 am #

    RWG

    I am confused. Why hasn’t Lufty been looking at Row44? They seem to be a perfect fit for these guys.

    Lufty wants something it can customize. They want something that works and they want it now. So, what’s the problem? If Southwest & Alaska are committed to Row44 and they obviously have serious credibility in selecting the right partners, shouldn’t that weigh in?

    Maybe zee Germans still needing some convincing? I can’t imagine why though.

    Where am I going wrong? What have I overlooked?

    “Stinky”

  2. sir peter levenforenstinson June 26, 2009 at 12:09 pm #

    I have flown WN, and used the Row44 service and I love it!!!

    RWG? Do you know when more planes will be equipped?

    SPL

    Great points again Stinky!

  3. Mary Kirby June 26, 2009 at 12:19 pm #

    Okay, lads. You both pose excellent questions – why not Row 44? The system works well; Alaska and Southwest clearly like it (as do their pax) and the firm recently secured Norwegian as a customer (ie. It’s pushing forward with plans for European coverage, regulatory authority, etc). To Stiny’s question – I think Panasonic has something going for it that perhaps no other company – save for Thales – can come close to matching, and that is a full-on customer service network in place. Panasonic can field problems/issues quickly. Row 44 is still a gamble (not unlike the Sukhoi Superjet). Also, Panasonic is in a sweetspot, as the number one IFE player in the world. The future, more than likely, for major premier carriers, will be fully integrated IFE&C. This is important, and Panasonic is offering it with its eX2, eXConnect, eXPhone, eXPort (for iPod connectivity) solutions.

    Sir Peter, Row 44 has not yet received permanent authority from the FCC. I think we can expect more news on this in the near-term. But carriers like LUV (that want Row 44) need also be have confidence that the company has the all-clear to expand. Check out my colleague Lori Ranson’s piece below…it talks about Southwest’s desire to equip a fifth aircraft.

    Southwest works to firm Row 44 installation on a fifth aircraft
    Lori Ranson, Dallas (27Apr09, 21:29 GMT, 456 words)

    Southwest Airlines is still in the process of determining installation of a Wi-Fi system supplied by Row 44 on a fifth aircraft.

    The Dallas-based carrier launched tests of the Row 44 system that utilizes Ku-band based satellite network to offer in-flight connectivity in February, and the system is now operational on four aircraft.

    During a recent interview with ATI Southwest senior manager of technologies and flight operations Doug Murri said those four aircraft are part of the proof of concept phase, and no firm date exists for the placement of the Row 44 system on a fifth aircraft.

    However, the carrier anticipates firming up a date for equipping the fifth aircraft within the next couple of months, says Murri.

    As the airline continues to monitor the testing Murri says the carrier would have an aggressive schedule for equipping its fleet, which according to Flight’s ACAS database currently stands at 538 Boeing 737 classics and next generation aircraft. He estimates Southwest would aim to complete fleet-wide installations in one-to-two years.

    Murri explains that Southwest got installation of the 170lb 77kg) system “down to under four days” on the four prototype aircraft. The carrier expects to find additional efficiencies in the process to reduce “the install significantly as we equip more aircraft”, he says.

    Southwest is still working through its pricing model for in-flight connectivity, but Murri assures that the carrier will be the price leader in that area. Pricing points for the air-to-ground Wi-Fi system supplied to Virgin America by Aircell is $12.95 for daytime flights longer than three hours, $9.95 for daylight trips less than three hours and $5.95 for red eye flights.

    American Airlines also uses the Aircell system, and charges $12.95 on long-haul transcontinental flights operated by Boeing 767-200s. The system is currently featured on 15 aircraft, but American plans to roll-out connectivity on more than 300 domestic aircraft during the next two years.

    Murri explains Southwest saw limitations in air-to-ground connectivity, and instead opted for Row 44′s satellite-based system. He also highlights Aircell has more control over price and wants to own the customer relationship. He notes that scenario is not dissimilar from the Airphone model of the past.

    Row 44 on the other hand, supplies Southwest more of a “wholesale model” says Murri. “We control the pricing and marketing.”

    Highlighting usage statistics Murri says more than 25,000 Southwest passengers have used the carrier’s inflight connectivity offering on more than 1,500 flights. The bulk of those users are accessing email “first and foremost”, says Murri.

    The system has exceeded Southwest’s expectations, particularly in the area of streaming video.

    Southwest is studying several revenue options for its connectivity offering including pay-as-you go, subscription models and offering the service as the time of ticket purchase.

    Source: Air Transport Intelligence news

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