Even though in-flight Wi-Fi has been around for more than a decade, many airlines and their passengers are still getting used to the idea that Wi-Fi in the air can be as good or better than what many people get on the ground. In this second episode of the Viasat in Conversation podcast for commercial aviation, Chris Phillips, head of corporate communications and PR at Viasat and Don Buchman, vice president and general manager of Viasat’s commercial aviation business — discuss some of the misconceptions people have about being connected in the air.
For airlines, it’s important to understand how these myths can be barriers to getting support and funding for digital transformation programs. Too often we see an airline select a connectivity partner based on misinformation, which can later be frustrating to the airline and then trickle down to frustration on the part of the passenger — as the connectivity promised, is not the connectivity delivered. By confronting some of the myths, this podcast offers airlines insights into how they can deliver enhanced passenger experiences by deriving even greater value from their digital transformation initiatives.
For passengers, dispelling these myths can help them better understand the advantages of being online in the air. Whether it’s staying connected to the office or their families or using it for news and entertainment, high-quality in-flight Wi-Fi can make those long hours in the air more productive and enjoyable.
Some of the topics touched upon in this podcast include:
- Where is the evidence that Wi-Fi at any altitude works well?
- Do clouds and other weather interrupt service?
- Is a good antenna all you need to get good Wi-Fi on a plane?
- What’s the big deal about Viasat being “vertically integrated?”
- Do Viasat’s many residential customers mean it’s not an aviation company?
- Why do so many people think Wi-Fi on planes isn’t very good?
- How do airlines figure out the truth about the best Wi-Fi for their fleet?
Transcript
Chris Phillips: [00:00:05] Hi all it’s Chris Phillips head of corporate communications and PR at ViaSat here. I’m sitting again with Don Buchman, vice president and general manager of Viasat’s commercial aviation business.
Don Buchman: [00:00:16] It’s great to see you Chris. Great to do this again.
Don Buchman: [00:00:18] This is exciting, it’s our second time right. I think I got pretty good feedback on the first one.
Chris Phillips: [00:00:25] Last time, you know we talked about digital transformation and the in-flight connectivity market and Wi-Fi in the sky becoming the norm. Definitely. You know I’m glad that you heard some great feedback. So did I. A lot of people are interested in how connectivity can benefit their airlines and their passengers. And then really that idea of like what’s needed to choose the right partner because as we know it’s all too easy for some to choose the wrong one. So today we’re going to take a different approach. We’re going to look at myth busters, a favorite topic I think of most people. And you know really break down some of these myths like ‘Wi-Fi on planes doesn’t work.’ Well, in fact we know it does work at 30,000 feet and it works extremely well. So let’s cover off these topics today. Connectivity on planes does it really work? Or are we still years out. On the last podcast we mentioned 82 airlines have some form of connectivity so something must be working. Let’s look at misconceptions in the marketplace. Is this based on customer experience or is this competitor-driven? And let’s close it out on why and how Viasat is changing the landscape for in-flight connectivity. Lots to cover. But let’s start with the big question: Where’s the evidence that Wi-Fi at any altitude works?
Don Buchman: [00:01:38] Well hopefully we’ve been proving it. You know we’ve been flying from JetBlue, our launch customer since December 2013 with our big media flight and ever since nothing’s changed right? It’s been, you know, whatever people want to do they do. All the way up to last week we did a media flight with El Al -- and was you know having been on both flights almost five years apart is pretty exciting watching somebody’s Facebook live the live match of the game that’s being broadcast to the Internet as other device - of the Belgum-France in the World Cup semi.
Chris Phillips: [00:02:07] It was definitely an intense game. Yeah I don’t know if it was more intense on the flight or more intense at the game.
Don Buchman: [00:02:14] It was pretty awesome watching that scene. Everyone’s joy you know basically here’s something you wouldn’t expect right. You know basically pull my device out and watch the game. You plug into my subscription and watch my game on my flight. Right. It wasn’t like the airline had to go think about it. Airline didn’t have to worry about the FIFA World Cup. Basically everyone brought the game with them. That’s sort of those are just artifacts of ... That’s what I would have done at a coffee shop right? Going back to our last podcast we use that example a lot. But that’s what I would’ve done on the ground so why can’t I do that in the air? And we’re basically doing it in the air we’ve been doing it. It’s just fantastic and passengers that know it love it.
Chris Phillips: [00:02:48] Here’s a question that I know that during media interviews we always get which is: Does weather affect the Viasat system?
Don Buchman: [00:02:55] Oh the old rain fade. Yeah so it rains okay. And obviously in really the techno geek speak of satellite technology is a higher frequency is more susceptible to rain. That’s the textbook theory. So Ku therefore it’s better -- you know a kind of dot dot dot that’s it. So buy Ku - buy a lower-frequency band.
Don Buchman: [00:03:14] So one of the things I always point to in a marketplace is here in United States we’ve got a residential business that — between us and our main competitor — we’ve probably got one and a half million subscribers that are on a home residential -- and of our entire markets of all one and half million all of those are on Ka-band satellites. There’s Ku over the U.S. but they’re not using them, they’re all on Ka-band satellites and, last I looked, all those homes are below the clouds and within the weather. And so you would think that if Ku is better above the clouds why would it be better, why would an airplane be better to use Ku versus Ka? If the home, and the home’s driven by economics, right? They’re competing with terrestrial solutions, so you want to have the best capacity at the lowest price. Ka is winning, so that same technology is going to win in all markets.
Chris Phillips: [00:03:58] Yeah. Here’s another thing that we always hear from competitors. We obviously have a very unique business model. We’re very diverse in our businesses, right. You know going after residential, government, commercial aviation, business aviation business internet and some other markets as well. Competitors always say that we’re a residential company and they treat it as a negative, right, which I always find really surprising.
Don Buchman: [00:04:21] Yeah it’s always interesting because you think about we’re a residential company and what are we doing, bringing the internet to the consumer and in a plane, are the people sitting in the plane not a consumer as well? So why would you have that same mentality to bring it to a consumer? So you had to have had a reason to build satellites that we have. In fact when we brought out ViaSat-1, the industry thought we were crazy. Right. Who needs a 100 gigabit per second satellite? No one’s ever done that before. There’s enough demand for 100 gigabits per second. It’s hard to believe in today’s day and age that someone would think that they would actually take the under on ‘is usage going to be there -- is there enough demand for capacity?’ So with ViaSat-1, we came out and proved you have to have a large market to sell that to and that’s -- residential is a large market. Aviation’s a large market. When you combine those together you get the best economic benefits to the broadest sense. And so why would you be putting the most capacity at the densest population and blending residential businesses with something like aviation. It just makes sense -- it’s the best economical way of delivering the internet.
Chris Phillips: [00:05:22] I mean, doesn’t having these diverse businesses really offset some of the costs as well?
Don Buchman: [00:05:27] It does. Yeah. For an aviation business, we’ve said that like, what 10 percent maybe we’d use our capacity to serve our airplanes here in the U.S. But we’d have to build 100 percent of the satellite to do that. But we didn’t have to, because we sold the other 90 percent to another market. So each market is sharing their cost.
Chris Phillips: [00:05:46] There’s a lot of misperceptions that are stemming from just the marketplace from competitors. And I think there’s a good opportunity for us to clear up some of that right. But let’s just talk about misperception in general. So is it competitor driven predominately do you think, with them adding you know, FUD, to confuse airlines, passengers, partners? Or have just not enough passengers really experienced good Wi-Fi in the air?
Don Buchman: [00:06:11] It’s a little bit of both. So if you invested in technology and it just can’t grow but you’re invested in that and you have to sort of stick with it you’re going to try to do what you can to preserve the status quo. And the status quo is: no one wants to stream video on an airplane. Remember that, when we had that one. We sat there on a panel and one of our competitors said no one wants to stream video on a plane. It’s, you know, why would you do that? And so it just seemed kind of odd but it was basically protecting the status quo. Right. So you have that right, you have your investments you want to protect your investment. It’s rational but it’s you know, not smart. Then you have the passengers right. They basically got excited when it first came out. You know Wi-Fi has been on planes since Connexion by Boeing in the early 2000s. Then you know it kind of relaunched again towards the end of the decade and now it’s you know pretty predominate — like you said, 82 airlines. But they’ve been exposed to pretty poor quality. And so they sort of remember that. Right. They’re going to go back and say ‘Oh yeah Wi-Fi and planes is not good’ because they think Wi-Fi on planes is a commodity, and one plane is the same as the rest of them.
Don Buchman: [00:07:11] So one of our missions has been to trying to prove that’s not true right. So a myth: Wi-Fi on planes isn’t good. So ... busted.
Chris Phillips: [00:07:17] What are the typical adoption rates for in-flight?
Don Buchman: [00:07:21] Yes so definitely when it’s free to the passenger it’s definitely a lot higher. So you’re seeing anywhere from five to 10 to 20 times higher on those, especially if you have long-haul flights -- like here in the U.S. we do a lot of coast to coast. We often see — especially in our airlines that offer for free — we see more devices on than people. So you see an aircraft with 172 seats plus crew and we’ll see upwards of 220, 230 devices on. And it is very typical across a five-hour flight. Even a lot of our short-haul flights, when it’s free. You know basically some business routes like LaGuardia to Boston, to Logan. You’re barely above 10,000 feet more than 10-15 minutes. And we see very high penetration given free. It’s business travelers, they want to be connected. They want to get the e-mail out. They want to see what’s happening even in those 10 to 15 minutes like they do in their train commute. If you have a 15-minute train commute, why wouldn’t a 15-minute airplane commute, why would you interact with your device differently? You’d be the same. So you see really high adoption’s once it’s free.
Chris Phillips: [00:08:22] Which totally makes sense. I know a lot of our competitors talk about that you know five to seven percent take-rate. But really there is an opportunity for increasing that. And we’ve seen that ...
Don Buchman: [00:08:33] One of the biggest myths when we entered this market, we had a lot of people ask us ‘why are you entering the in-flight connectivity business?’ That’s terrible. I mean it’s already proven that only 5 to 7 percent of the people want to use it. You’re not going make any money. It’s like well you know it goes back a long while back but it was you know we thought there was much higher demand. As soon as a plane landed, what did everyone do, they started interacting with it. And it wasn’t because they had the comfort of the ground, it was because they ...
Chris Phillips: [00:08:57] FOMO. It all comes back to FOMO.
Don Buchman: [00:09:01] They wanted to be connected. Right they just couldn’t. There was friction: cost and quality. Remove those two barriers and now what we’re seeing is people are very comfortable using connectivity in-flight.
Chris Phillips: [00:09:11] So let’s switch gears for a quick minute. What is Viasat doing to change this perception?
Don Buchman: [00:09:17] You know really it’s awareness, right? A lot of it’s sort of removing that friction moving that ... I get a device sometimes your phone is in your backpack and it’s up in an overhead bin or it’s in your it’s in your purse below the seat and you forget it’s there. And so a lot of it is just sort of interacting with it so some of it’s awareness: just the phone all of the sudden beeps, you’re in-flight. You get an update you get something happens and then it’s just like it, again, at the coffee shop. If you got a text message come in you start interacting with it. You wouldn’t expect that on a flight and all of the sudden it’s there. So one of the ways is to get awareness — just get that device alive, get it online and make people aware that there is connectivity. And then they don’t even realize that they’re sitting on an airplane in a seat. It’s like ‘oh holy cow I just had a whole conversation I didn’t realize I was on a flight.’
Chris Phillips: [00:10:03] So a key difference to our system versus other systems is just the spacecraft itself. And we hear a lot that it’s not about the spacecraft, it’s about the antenna. And so I would love for you to take a few minutes to talk about the difference between systems and why we focus on the spacecraft and why satellites are just so important.
Don Buchman: [00:10:27] Yeah well you know we always. you’ve heard me talk the whole time, there’s a magic word ‘capacity’ right. That’s really what it is. We’re trying to develop the most capacity. And last I looked, antennas don’t have capacity, antennas receive signals and transmit signals. And so an antenna plays a role in the loop right, but it’s not the loop right. So the dominant factor in a system is the satellite itself. How much capacity, how much is available to how many devices or people -- like airplanes or homes or boats or grocery stores, whatever it may be that wants to interact with the communication channel. The antenna is just as a means of transmitting and receiving it. So if you have a satellite that’s 100 times better than another one and an antenna that would say, given marketing out there twice as good as another one, would you rather have a hundred times better or twice better? I think I’ll go the 100 times better. So that’s how that gets back to the passenger is how you see the service being offered right? Someone could offer a streaming service for free because of that capacity and how much it costs to use those bits, and that’s how it’s manifested. We like we like to talk about our antenna by not talking about it because, it just works, right? So the system is, someone gets off the plans and goes ‘wow what a great antenna!’ The basic concept. Wow, can believe I just watched the World Cup semi-final on a flight, and they didn’t have TV on that plane. I just had internet. I mean that’s what people talk about, they don’t talk about ‘that was a great antenna.’
Chris Phillips: [00:11:56] I’ve never heard that myself. So hey I have two questions left. OK. The first question is how important is a vertical integration strategy? We talk about that a lot as being critical to our business and to how we enable unflexed pieces of our business. And we definitely hear from competitors that aren’t vertically integrated. This is not a big deal. So can you add some color there?
Don Buchman: [00:12:19] Yeah there’s multiple dimensions to that question. One of them is just ‘one stop shop’ right? So if something goes wrong, you don’t want to have a consortium of people pointing fingers at each other. It was the antenna, it was the modem, it was the satellite, it was the ground, it was him -- something, right? So that’s a little of what you get with a kind of a federated solution. Right. So that’s a little bit of -- you still get the most reactionary, the best service quality right. It’s just you know something when you own it all you fix it all you understand every bit. So it kind of goes without saying. The other piece of it is every element, if you get these general-purpose satellites, general-purpose equipment, they’re designed for the general purpose, right? They weren’t designed to deliver the internet. What we’ve done is we’ve actually thought about the problem holistically, the whole system right. So we’ve got this big massive satellite up there with massive capacity, but then there’s also like OK where are the bottlenecks? Is it in the modem, is it the antenna, is it in the Wi-Fi access points? We know exactly what we’re delivering. So we develop the entire thing as a system. We also collapse all the elements right. I don’t need to go buy an antenna from Vendor A and a high-powered amplifier from Vendor B and hopefully someone else has a power supply that powers the whole thing up and then hopefully I can get WAP from somebody. Basically when you design as a system you know exactly what elements in there you minimize how much is there. Minimization is very good right. So weight, cost and all that kind of go down, but also reliability. Right. I know the purpose, to stay online. You don’t design it to break, and you want to do that. So being vertically integrated allows us to basically design a whole system. Miniaturize where we can, combine systems together — just like our cell phones have gotten more powerful and smaller over time because they’ve all been sort of combining all these functions together. We’re doing that. But it’s also we’re delivering the internet right. I mean all the innovations we’re making because Viasat as a company survives as we keep up and exceed our customers’ demands, and that’s what we continue to do and all those get brought right down to every element of our system.
Chris Phillips: [00:14:08] Okay so I told you that I had one last question, because we’ve covered a lot of ground here today. But before we jump off let’s just end on an action-based question. So how do airlines that want to embark on a true digital transformation strategy, how do they get at the truth? Right? They’re busy running airlines and keeping the air spaces safe. They just don’t have time to be experts in the internet too. So what can they do to educate themselves and look past the myths?
Don Buchman: [00:14:38] Yeah it’s a hard question right. I don’t envy the position of someone having to go off and buy with a lot of competitors and they’re basically sending their marketing out and basically saying ‘I’m the best I’m the best I’m the best.’ It is difficult right. I mean you know we’re consumers ourselves and we get the people hitting us with ‘we’re the best we’re the best.’ But you have to look for as an airline is as a buyer. What am I buying, right? And is that thing going to have an enduring value because it is, it’s a big investment. You know the systems stay on aircraft for seven to 10 years, often. And you want to make sure that you know I didn’t buy a 2G cell phone. And all of the sudden LTE comes out, and 5G and that’s effectively what’s happened today. So you want to make sure that you can basically get up to the -- you know continue to move. So you’ve got to look at what am I buying? It’s capacity right? So digital transformation is all about the connected, whether it’s the engine being connected to the cockpit, being connected to the crew, the passengers, the whole entity be connected. So what’s the source of connectivity or what is the value of connectivity, it’s a lot right? And I want to not think about connectivity. I want to just basically make use of these devices, and not have connectivity be the thing that changes my decision. ‘Oh we can’t do that because it costs too much. We can’t do that because there’s not enough bandwidth, we would have to take something away from you know the guy sitting in seat 18A.’ But you basically thought, oh I can get value out of that I want to connect up that device on an aircraft and I get value? Do it right? And then you don’t think about capacity and that’s, when you kind of boil that back down and digital transformation. You want to be with a company and a system that you don’t have to make that choice. You don’t have to make that choice between this bit or that bit. Have both bits.
Chris Phillips: [00:16:09] And as you’ve said before it should just work.
Don Buchman: [00:16:11] It should just work out. That’s what I like.
Chris Phillips: [00:16:13] That’s what we all like. So Don, as always, totally enjoyed our chat. Thanks so much. So now we can just stay connected anywhere. Thanks for time. And we will be back in a few I guess in a few weeks, in a month, with our next one.
Don Buchman: [00:16:32] Send your podcast responses back to us if you’re listening. In air, that’d be fantastic.
Chris Phillips: [00:16:35] That would be super cool. All right. Thanks everyone. Thank you.
