Should we expect that being connected online with fast, reliable Wi-Fi is the new normal? In this, the first episode of the Viasat in Conversation podcast, Chris Phillips — head of corporate communications and PR at Viasat — talks to Don Buchman about how Viasat is disrupting the in-flight connectivity world with its high-capacity satellite network.
Buchman is the vice president and general manager of Viasat’s commercial aviation business, and in this 15-minute podcast, he and Phillips touch on some of the top issues about in-flight connectivity:
• The benefits to airlines and passengers; • What airlines need to consider when choosing their IFC partner; • How Viasat has disrupted the industry to provide the best service out there; • Whether the free Wi-Fi we see in places like coffee shops is coming soon to an airline near you; • The differences between IFC providers and the importance of capacity; • How airlines can offer Wi-Fi free or low-cost with strategic sponsorships.
Transcript
Podcast: Don Buchman and Chris Phillips talk about in-flight Wi-Fi
Chris Phillips: Hi everyone. It’s Chris Phillips head of corporate communications and PR at Viasat. I’m sitting here with Don Buchman and we’re ready to kick off the commercial aviation podcast series on digital transformation.
Don Buchman: This is exciting.
Chris Phillips: This is exciting! For those of you who don’t know Don -- and that really probably is just a few -- he’s the vice president and general manager of Viasat’s commercial aviation business. And Don thanks for joining us.
Don Buchman: Thanks for hosting us and let’s see how this goes.
Chris Phillips: I promise this will be fun. Promise. OK so you’ve been busy these last few years there’s no doubt about it. You’ve been disrupting the in-flight connectivity market. So it’s really great to sit down and chat and just discuss what digital transformation is and this whole in-flight connectivity market. One thing that we wanted to do was really focus on a recent white paper that Viasat completed on Wi-Fi in the sky becoming the norm. The paper noted that 82 airlines today offer in-flight connectivity. So I definitely want to explore the types of Wi-Fi and business models offered today. And in addition to that let’s also talk about the benefits to the airlines, the passengers to the ISPs. And finally, it will be great to just wrap on what airlines need to consider when reviewing the market. Everything from technology to experiences, vision — you know, the whole shebang. Because we all know that all Wi-Fi is not created equal. So you’ve got a lot to cover off in 15 minutes. Are you ready?
Don Buchman: Let’s do it.
Chris Phillips: OK let’s just jump in. OK. So the first question. This is a big one. Why is in-flight Wi-Fi different from carrier to carrier on the airlines’ side and then from ISP to ISP?
Don Buchman: Yes really it sort of kind of goes back to the core. What are you delivering with in-flight Wi-Fi? Is it, are you delivering an antenna, are you delivering a modem? You’re actually delivering an experience, and what makes up that experience is how much capacity do you have? And so what really varies from carrier to carrier, ISP to ISP is the technology and the infrastructure they’re basically basing their Wi-Fi system on.
At Viasat, our carriers are enjoying the highest quality that they can have. That is just our structural advantage. We’ve basically built satellites purposely built for the internet. So what’s the internet? The internet is not just text messages and web browsing. It’s what you do on the ground, and that’s what we see in the air. And so as you kind of go it’s really hard to believe. I mean I look at Twitter a lot and I just see people on JetBlue and Quantas going, “How come I get this for free. And I have to pay 30-40 dollars on another airline and it doesn’t even work. And it’s free when I can do streaming.” So it’s like a really stark contrast to what you’re seeing from airline to airline, ISP to ISP.
Chris Phillips: OK. So you mentioned on the ground and more and more today’s passengers just don’t expect connectivity in the air. They expect the experience to mirror what they’re getting on the ground. And are we at that point yet?
Don Buchman: I think we are. I mean that’s what we’re showing today. So we’re in-flight and that’s what is really backed up by what people say. I don’t say it -- It’s just people I listen to what they say, and it’s just like on the ground. We do all these flights we look at Twitter as well that actually and sometimes even better like we often see tweets say “Well that was better than my home cable. Like how can I get this in my house?” And they’re doing it at 30,000 feet going 500 miles per hour. So it’s fantastic it’s there, it’s today. The customer no longer has to think of the Wi-Fi the old they got used to that it’s expensive and slow. It’s actually is, there’s a real Wi-Fi out there and it works.
Chris Phillips: Super cool. So you mentioned that in the old times it’s like expensive. So are we moving towards a free model? So you know I love this example: customer walks into a coffee shop and they expect two things. They expect coffee and they expect free Wi-Fi. Are we getting to a point where passengers will expect a safe flight and a fully connected aircraft but they’re connected experience -- totally free.
Don Buchman: That’s what we’re making that’s our aim right. So each airline is going to have their own way of implementing Wi-Fi. You know each airline has its own business model. But right now there are two airlines out there in the world that we know of that are customers that are offering for free, and offering the full free internet and it’s fantastic. I mean people walk on and they just stay connected. Now they’re planning their day around it. It used to be that was my time to be disconnected. Now it’s actually my time to be connected.
Chris Phillips: For sure. So how are we making it free?
Don Buchman: Well that’s getting kind of goes back to the ...
Chris Phillips: The secret sauce ...
Don Buchman: I can’t tell you that! It’s actual what Viasat brings. I mean it’s really this new ... When you have an advantage like we do our satellites, right? We invested a lot into basically bringing real capacity at the best economics to the market. You know those are kind of big heady very structural terms. But what does that really mean at the end? It means a passenger can walk on, and the cost of that internet was something that was so low and the quality was so good that the airline just like a bag of peanuts or Coke, they could buy it from a vendor and give it away for free as an amenity to their passenger. And airlines more and more because Wi-Fi so important -- choosing to do that.
Chris Phillips: So you’ve mentioned capacity a few times, capacity clearly is driving a lot of benefits. So it’s a great transition point to talk benefits. So just simply put: What benefits can a connected aircraft bring to the airline today. Let’s talk the whole thing right. Let’s talk like cabin, cockpit, operationally on the ground.
Don Buchman: So the benefits is across the board right. So you think of sort of who’s the ecosystem on a plane right. You’ve got you’ve got the pilots and the crew right. They want to fly a safe plane. They also want to be connected right to the ground right. There’s often there’s things they’re doing, looking for weather. Where’s my next station? What’s my next flight. What’s the manifest? So there’s a lot of benefits you can bring that often pilots have to load everything up at the gate and then they’re essentially not getting any updates until they get back to the ground again. What if you’re able to update them so they’re able to do their jobs better?
In the back of the cabin, you know the crew can essentially know what’s happening with the passengers and communicate any faults on the plane or communicate back to the ground in real time. So you get a lot of just benefits from the crew being connected to do their jobs better and make their job easier. You get the passenger right the airline you know they’re in business to transport me and you folks like us to point A to point B … and so for the passenger what benefits they can get. They can choose not to use Wi-Fi right. I mean that’s you they can have a respite and sort of rest or they can check it. Right. It maybe it’s following their latest sports scores, it’s catching up on e-mail. It’s watching a video, it’s getting with you know connecting with their Hulu or Netflix account, streaming audio. You know all those sort of things, you can kind of come in, the passenger can get -- just like the coffee shop example -- they can do they want to do right? They get to drink their coffee and they can do what they’re going to on their devices and to be an extension of what they’re working on and what they’re doing.
Then you get the airline themselves, you know the airline, this aircraft is now part of the network. It’s connected, so it knows what’s happening in flight, if there’s a fault, if there’s a maintenance activity ... that could be in real time sent off the aircraft back to the ground. So the parts you know, if it’s a part that’s not broken yet, but they have some visibility is going to be broken or needs wearout, they can get that done and have it ready on the ground when they get there. They make the turn quicker. The maintenance guys get all the data off so they can when they get the aircraft in the shop they know what to go look at and what parts to go find.
Now you can bring on from the airline as well. You know what other benefits can I bring and you’ve got this ecosystem you talked about sponsorships and things along these lines. Those passengers are consumers right. So some consumer brands may want to get their product in front of the passengers. In this day and age of the Internet, you know, streaming is a big thing right. So if I’m a second or third player in the marketplace I might want to use those passengers to get used to my product. So whether it’s an audio streaming service or a video or anything new ... and we’re seeing more and more these bundles coming out -- Disney -- everyone’s sort of getting into that disconnected you know the non-linear TV market. And those are pretty interesting. So there’s a lot of sponsorship opportunities, lot of advertising opportunities so that also brings benefits.
Chris Phillips: That’s great. I have a hard question an easy question for you. Which one you want first?
Don Buchman: Let’s go hard one.
Chris Phillips: Hard one, OK. Who do you follow on Instagram? Because I know that when you’re flying you’re constantly on Instagram.
Don Buchman: So my first follower is Dave the Bearcoat. And Tokyo. And my niece Brynne.
Chris Phillips: That’s awesome. Ok well thanks for playing now know. OK so from the easy side though, is there enough capacity to handle all of these different needs, right? From the cabin cockpit, operation on the ground and then the passenger who is already taking up so much capacity.
Don Buchman: Yeah so in our system there is and I think that’s one of the sort of the failure cases you’ve seen with previous systems in other ISPs like we started the conversation with. They essentially ran out of bandwidth. There wasn’t enough for all these activities. So they end up having to curate the internet. OK you can’t watch video because that’s too much. I’m going to charge a really high price so not many people get on. You can’t do this you can’t do that. Crews stay off it and things along those lines, you can’t do it. What we did was we said I think everyone wants to be on so let’s design a system that can support all that. So what’s the natural demand? Let’s support the natural demand. That’s what have we done. Starting with ViaSat-1, now ViaSat-2 and on to ViaSat-3. You know each time you know what’s good today is not good enough tomorrow. And so that’s why we continue to increase our capacity, because just the norm today is not the norm tomorrow.
Chris Phillips: Fully understand. You know you talked about business models -- there’s a lot out there. Can you maybe just get a high-level scope of the types of models out there?
Don Buchman: So quite a bit just like most services there’s quite a bit of business models. So you know each airline has a different business model right you have your full service carriers. So basically one ticket price and you get everything: food, service, amenities ... you basically get a better seat -- all those sort of things bundled in. It’s a full service, heavy on loyalty. Then you have on the one end of the spectrum is the ultra-low cost. So really it’s an a la carte menu. Basically what I’m buying is a ticket to get from A to B and then everything else I want on that journey I can pay for it, at my option. So what we’re seeing is on the full0-service carriers, so something like Wi-Fi being bundled in. Right. So that’s sort of the free to passenger model. So it’s an amenity from the airline. The other end of it is it’s a pay for play model. So basically if the passenger wants to rest the rest, they want to pay they can pay. And so that’s the deal that’s available. It’s a good internet but they pay for a fee and the airline is going to resell that fee to their passengers, like they do a bottle of Coke, or something else in those models.
Chris Phillips: So I love the sponsorship type model ... the one that JetBlue has with Amazon. Do you think that more airlines will go down that path?
Don Buchman: I think we’re seeing that right. I think it’s a new marketplace for them. I think there’s a lot of things being done around that trying to figure it out but I think that is a really good model. And I think JetBlue ... given that it’s been pretty lasting. I mean it’s I think it’s been good for all the people in the system and I mean it’s just it’s kind of gone on they’re getting good brand awareness for the Amazon and this example. They get brand awareness they get people exposed to their product lines. They’re constantly evolving their product lines. They’re getting them to use Amazon services more and more. JetBlue’s passengers seem to really benefit from it.
Chris Phillips: So I mentioned that we’d wrap on what airlines need to consider when reviewing the market. So what do the airlines need?
Don Buchman: I think it’s a lot of what we just talked about, right? So one of the things you have to think about, what are you selling, right? When you’re bringing Wi-Fi to a plane and to a passenger. What is it, what’s the core element? The core element is the internet. But really what does that mean, right? I want to do things I do in a ground right, whether I’m at home or the coffee shop example ... I’m on my mobile phone around town. And so what are those elements they need to have and can it keep up. You’d asked about all those different services we talked about and ecosystem. Do I have enough capacity to do that? That’s the first question is not just think about what today’s need. Oh I think 5 percent of the people might be willing to spend 30 dollars for internet -- how much capacity does that need? OK I’ll buy that. You could solve today’s problem if that was your business model. But you may not solve tomorrow’s problem if every one of your airline competitors went free. And you went to your vendor and said ‘OK. All the rest my competitors went free so give me that free option.’ Uhhh ... We can’t do that. We don’t have enough capacity. That’d be really bad right. So as you’re thinking about it so that’s one of the things you have to have a system that’s got that thing ... and it’s not just capacity it’s also at what cost right? Because if it’s so much capacity but you have to point billions of dollars of assets towards one play that wouldn’t be very economical -- you couldn’t afford it. So it has to be something that’s within your budget but also serves the need which is there. That’s the most fundamental thing I think you have to think of. Then it’s working with a company that’s really reliable.
Chris Phillips: Yeah I think trust in a partnership is always critical too. So what should airlines be looking for in a trusted partnership? Is there is there one thing that outweighs the other? Is it technology and future proofing, financial stability and longevity, scalability ...
Don Buchman: Boy, all of those are kind of intertwined right. I mean I think you really want a company that’s going to be around. We’re in the age of startups, right. Startups come and go and you want to be the company that’s going to really have a fundamental sticking power in the marketplace and they’re delivering what the market wants right. They’re not just making money but they’re actually delivering a product that’s being valued. And so that’s one of things we feel like we are bringing to the market is that value, but it’s also reliable -- you want a reliable partner. You want one that’s going to say what they mean and mean what they say, and that’s everything from how do I support the airline partner, how does my equipment work, am I helping the airline be a better airline by being a good partner? All those things kind of go into it and ... those are pretty easy things like table stakes that any company should be trying to do for their customers. But when you do that with the ability to sort of be there long term I think you’ve got the secret sauce.
Chris Phillips: Awesome. We’re going to close this out with one last question. Are you ready? If you are going to predict the future, Don, in commercial aviation, what will the future connected experience look like?
Don Buchman: So big picture: seamless. You don’t even know you’re connected because you are connected. I mean that’s really how I see it. In our daily lives today we go around, we don’t think about our phones. When I went to the Starbucks, in your example of coffee shop: I walked in, I didn’t make a conscious decision to do something when I get in my car. I’m just connected all the time. I look at my phone, I don’t look at it to get it connected, I look at it because I want information off it. Or my device. On an airplane, why should we walk in and all the sudden it’s a new place? I should just pick up my phone and it’s just connected. No matter if it’s a takeoff, mid-flight or landing ... and just interact with it and that device is always on always connected and it’s just doing what I want to do, what I need out of it. That’s how I see the world kind of coming to.
Chris Phillips: And what’s the timeframe for that?
Don Buchman: Today. That is available today. That’s one of the things we do bring. I mean it’s fantastic. ... you know basically our devices remember the airplane, you can be auto connected ... they can come on, you really don’t have to have conscious decisions anymore. Right now, actually, our biggest problem is awareness. The market has been exposed to such large amounts of bad Wi-Fi that I think they become jaded that it’s not possible in the air. And one of my missions is to basically tell the world that it’s changed. That is not the norm. That is the past, that is so last year. We’ve been doing this for five years, so it’s actually been around. So we’re basically we’re on a mission, banging that pot, running around the world telling everyone that’s possible and get connected, because it works.
Chris Phillips: Well that’s super cool for multiple reasons, but you also set up our next podcast series, which is debunking the myths of in-flight connectivity. Don thanks so much for hanging with us today and being a good sport answering all these questions. I hope it was fun.
Don Buchman: It was fun.
