Valour Consultancy has forecasted that Amazon Leo will connect more than 5,000 commercial and business aviation aircraft by 2035.
However, Valour Consultancy notes that it must move quickly to challenge Starlink’s ever–growing first-mover advantage. Starlink already has a backlog of over 8,000 commercial aircraft and has installed its service on more than 1,000 business jets.
The market intelligence provider’s latest report details how Amazon Leo is entering the In-Flight Connectivity (IFC) market at a pivotal moment, as airlines increasingly migrate away from traditional Geostationary Earth Orbit (GEO) satellite connectivity towards Low Earth Orbit (LEO) and multi-orbit solutions.
David Whelan, Research Manager at Valour Consultancy said: “Amazon enters the aviation connectivity market with some significant advantages, most notably its financial strength, global brand and the confidence that airlines have in its ability to build and operate large-scale technology infrastructure.
“However, Starlink has already taken numerous large contracts off the table – at least for now – and every additional airline commitment makes the market more difficult for Amazon to penetrate.”
Amazon has commitments from Delta Air Lines and JetBlue for more than 500 commercial aircraft, although the Amazon Leo network is still in the early stages of deployment. The consultancy noted that Amazon’s most significant near-term opportunity lies in the large-scale migration away from GEO-based connectivity. “Amazon does not need to win the entire market to establish a significant aviation business, but it does need to execute quickly,” Whelan said.
“Its strongest opportunity is likely to come from a combination of GEO replacement, under-connected markets, new aircraft deliveries and price-sensitive airline segments. If Amazon can bring a competitive service to market on time and undercut Starlink on price, we believe it can secure a meaningful share of the market.”
The Valour Consultancy report identifies one clear opportunity which is within the low-cost carrier segment where IFC penetration remains relatively low, as well as opportunities in Asia-Pacific, where Starlink, constrained by regulatory issues, has not built as significant a customer base as it has in Europe, the Middle East, and North America.
“Performance and price will be the two most important factors in determining whether Amazon can compete successfully with Starlink and the multi-orbit suppliers,” Whelan noted.
“We expect Amazon to be capable of matching Starlink on performance, meaning that price is likely to become the key battleground. Greater commercial flexibility, broader regulatory coverage and a lower cost of entry could also help Amazon differentiate its proposition.”
