Michael Childers, Managing Editor WAEA Industry News (WIN) Single Focus Workshop: Connectivity 25 March March 2010 WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A

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Not much room for dispute here. 3

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A But will passengers pay? Not much room for dispute here. 4

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A And what technology will be used? But will passengers pay? Not much room for dispute here. 5

Service ProvidersKind of ServiceAircraft in Service Jan Airlines Aircell Gogo ™ Air-to-Ground (ATG); service over U.S. via land-based towers; video coming in 2010 < 700 [677 at 22 December] Air Canada, Air Tran, American, Continental, Delta/Northwest. United, US Airways, Virgin America AeroMobile Inmarsat Classic providing cellular voice and SMS service in the cabin 67Emirates, Malaysia OnAir Inmarsat L-Band Swift Broadband providing cellular in the cabin & Internet connection 88British Airways, Oman, Royal Jordanian, Ryanair, TAP Portugal. Wataniya Row 44 Ku-band satellite using Hughes network; full broadband 5Alaska, Southwest LiveTV Kiteline ATG in the 1 MHz slice of 4HHz spectrum in the 800MHz band, sending WiFi in the aircraft 1Continental, JetBlue WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 6

Service ProvidersKind of ServiceAircraft in Service Jan Airlines Aircell Gogo ™ Air-to-Ground (ATG); service over U.S. via land-based towers; video coming in 2010 < 700 [677 at 22 December] Air Canada, Air Tran, American, Continental, Delta/Northwest. United, US Airways, Virgin America AeroMobile Inmarsat Classic providing cellular voice and SMS service in the cabin 67Emirates, Malaysia OnAir Inmarsat L-Band Swift Broadband providing cellular in the cabin & Internet connection 88British Airways, Oman, Royal Jordanian, Ryanair, TAP Portugal. Wataniya Row 44 Ku-band satellite using Hughes network; full broadband 5Alaska, Southwest LiveTV Kiteline ATG in the 1 MHz slice of 4HHz spectrum in the 800MHz band, sending WiFi in the aircraft 1Continental, JetBlue In North America we had Aircell’s Gogo ATG service… WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 7

Service ProvidersKind of ServiceAircraft in Service Jan Airlines Aircell Gogo ™ Air-to-Ground (ATG); service over U.S. via land-based towers; video coming in 2010 < 700 [677 at 22 December] Air Canada, Air Tran, American, Continental, Delta/Northwest. United, US Airways, Virgin America AeroMobile Inmarsat Classic providing cellular voice and SMS service in the cabin 67Emirates, Malaysia OnAir Inmarsat L-Band Swift Broadband providing cellular in the cabin & Internet connection 88British Airways, Oman, Royal Jordanian, Ryanair, TAP Portugal. Wataniya Row 44 Ku-band satellite using Hughes network; full broadband 5Alaska, Southwest LiveTV Kiteline ATG in the 1 MHz slice of 4HHz spectrum in the 800MHz band, sending WiFi in the aircraft 1Continental, JetBlue In North America we had Aircell’s Gogo ATG service… ….competing with Row 44’s Ku-band full broadband… WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 8

Service ProvidersKind of ServiceAircraft in Service Jan Airlines Aircell Gogo ™ Air-to-Ground (ATG); service over U.S. via land-based towers; video coming in 2010 < 700 [677 at 22 December] Air Canada, Air Tran, American, Continental, Delta/Northwest. United, US Airways, Virgin America AeroMobile Inmarsat Classic providing cellular voice and SMS service in the cabin 67Emirates, Malaysia OnAir Inmarsat L-Band Swift Broadband providing cellular in the cabin & Internet connection 88British Airways, Oman, Royal Jordanian, Ryanair, TAP Portugal. Wataniya Row 44 Ku-band satellite using Hughes network; full broadband 5Alaska, Southwest LiveTV Kiteline ATG in the 1 MHz slice of 4HHz spectrum in the 800MHz band, sending WiFi in the aircraft 1Continental, JetBlue In North America we had Aircell’s Gogo ATG service… ….competing with Row 44’s Ku-band full broadband… …and maybe Live TV’s Kiteline for text only. WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 9

Service ProvidersKind of ServiceAircraft in Service Jan Airlines Aircell Gogo ™ Air-to-Ground (ATG); service over U.S. via land-based towers; video coming in 2010 < 700 [677 at 22 December] Air Canada, Air Tran, American, Continental, Delta/Northwest. United, US Airways, Virgin America AeroMobile Inmarsat Classic providing cellular voice and SMS service in the cabin 67Emirates, Malaysia OnAir Inmarsat L-Band Swift Broadband providing cellular in the cabin & Internet connection 88British Airways, Oman, Royal Jordanian, Ryanair, TAP Portugal. Wataniya Row 44 Ku-band satellite using Hughes network; full broadband 5Alaska, Southwest LiveTV Kiteline ATG in the 1 MHz slice of 4HHz spectrum in the 800MHz band, sending WiFi in the aircraft 1Continental, JetBlue In North America we had Aircell’s Gogo ATG service… ….competing with Row 44’s Ku-band full broadband… …and maybe Live TV’s Kiteline for text only. Internationally, AeroMobile offered cellular voice & SMS via Inmarsat… WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 10

Service ProvidersKind of ServiceAircraft in Service Jan Airlines Aircell Gogo ™ Air-to-Ground (ATG); service over U.S. via land-based towers; video coming in 2010 < 700 [677 at 22 December] Air Canada, Air Tran, American, Continental, Delta/Northwest. United, US Airways, Virgin America AeroMobile Inmarsat Classic providing cellular voice and SMS service in the cabin 67Emirates, Malaysia OnAir Inmarsat L-Band Swift Broadband providing cellular in the cabin & Internet connection 88British Airways, Oman, Royal Jordanian, Ryanair, TAP Portugal. Wataniya Row 44 Ku-band satellite using Hughes network; full broadband 5Alaska, Southwest LiveTV Kiteline ATG in the 1 MHz slice of 4HHz spectrum in the 800MHz band, sending WiFi in the aircraft 1Continental, JetBlue In North America we had Aircell’s Gogo ATG service… ….competing with Row 44’s Ku-band full broadband… …and maybe Live TV’s Kiteline for text only. Internationally, AeroMobile offered cellular voice & SMS via Inmarsat… …& competed with OnAir’s L-band SBB cellular in the cabin + Internet access. WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 11

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 12

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A Considerable efforts are being made to reach critical mass. 13

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 14

The biggest elephant in the room: Will pax pay—and if so—how much? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 15

The biggest elephant in the room: Will pax pay—and if so—how much? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 16

The biggest elephant in the room: Will pax pay—and if so—how much? As usual, I called on an expert to help me to understand what was going on… WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 17

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A Fortunately my Contributing Editor Brendan Gallagher also has expertise in Connectivity 18

Is Ka-band coming? And if so, how will it change the competitive landscape, pricing, and service offerings? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 19

A journalist’s look at Connectivity in IFEC And is Ku-band close to saturation, pushing the cost of bandwidth up? The cost side of the equation is key. Row 44, for example, relies on a cost- effective deal for bandwidth with Hughes. But what are the cost differences among the various technologies? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 20

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 21

A journalist’s look at Connectivity in IFEC Connectivity entered the market offering visions of pax paying for the right to connect, with ad revenues, inflight sales, and other contributions to revenues and airline bottom lines. But has the industry embraced connectivity in such a way that it has become a “must-have” service—even if it costs more than it brings in in revenues? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 22

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 23

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A What happens if passengers are simply unwilling to pay, and also unwilling to fly your airline if they can’t be connected? 24

A journalist’s look at Connectivity in IFEC Row 44 has been aggressive with regard to ancillary revenue streams, but are they enough? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A What happens if passengers are simply unwilling to pay, but unwilling to fly your airline if they can’t be connected? 25

A journalist’s look at Connectivity in IFEC Row 44 has been aggressive with regard to ancillary revenue streams, but are they enough? Some look for a combination of pax-pay and ancillary revenue, but when you get into AVOD, are you outside your core competence? Will there be new partnerships? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A What happens if passengers are simply unwilling to pay, but unwilling to fly your airline if they can’t be connected? 26

A journalist’s look at Connectivity in IFEC Row 44 has been aggressive with regard to ancillary revenue streams, but are they enough? Some look for a combination of pax-pay and ancillary revenue, but when you get into AVOD, are you outside your core competence? Will there be new partnerships? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A What happens if passengers are simply unwilling to pay, but unwilling to fly your airline if they can’t be connected? And are the take-up rates too low? 27

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 28

A journalist’s look at Connectivity in IFEC Hypothetical: A satellite provider offers 30Mbps per transponder and has an IFEC supplier with 1,000 aircraft. How many transponders will be used? What is the ratio of aircrafts to transponder,.i.e.., what is the data rate per aircraft? How many aircraft are inflight at once sharing the bandwidth? What about peak travel periods? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 29

A journalist’s look at Connectivity in IFEC Hypothetical: A satellite provider offers 30Mbps per transponder and has an IFEC supplier with 1,000 aircraft. How many transponders will be used? What is the ratio of aircrafts to transponder,.i.e.., what is the data rate per aircraft? How many aircraft are inflight at once sharing the bandwidth? What about peak travel periods? Will there be Service Level Agreements, and if so, what will the standards be? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 30

A journalist’s look at Connectivity in IFEC Will there be Service Level Agreements, and if so, what will the standards be? Is this going to come down to who has the fastest service? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 31

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 32

A journalist’s look at Connectivity in IFEC We seem to have a lot of disagreement over Service Level standards… WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 33

A journalist’s look at Connectivity in IFEC We seem to have a lot of disagreement over Service Level standards… We seem to disagree over what the technology is capable of… WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 34

A journalist’s look at Connectivity in IFEC We seem to have a lot of disagreement over Service Level standards… We seem to disagree over what the technology is capable of… We even disagree over the window of opportunity. WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 35

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 36

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A In Europe, despite its great success onboard Emirates, AeroMobile found itself needing additional funding, and went into administration until Telenor—who owned 99.88% of AeroMobile—bought the company out of administration and announced it was committing for the long term. 37

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A In Europe, despite its great success onboard Emirates, AeroMobile found itself needing additional funding, and went into administration until Telenor—who owned 99.88% of AeroMobile—bought the company out of administration and announced it was committing for the long term. AeroMobile celebrated its return with a new order from Turkish Airlines 38

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 39

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A Another facet of the AeroMobile story is its alliance of sorts with Panasonic, who functions very much like a value-added reseller. So another question arises—who is aligned with whom? And why? 40

A journalist’s look at Connectivity in IFEC And might these relationships and alliances change over time? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A Another facet of the AeroMobile story is its alliance of sorts with Panasonic, who functions very much like a value-added reseller. So another question arises—who is aligned with whom? And why? 41

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 42

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A In the Middle East, Emirates and AeroMobile have a good success story underway, albeit with a different kind of service than offered in North America. 43

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A In the Middle East, Emirates and AeroMobile have a good success story underway, albeit with a different kind of service than offered in North America. And in Europe and Africa OnAir continues to sign airlines, and focuses on mass-market adoption... 44

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A In the Middle East, Emirates and AeroMobile have a good success story underway, albeit with a different kind of service than offered in North America. …while in North America the question remains… who pays? And in Europe and Africa OnAir continues to sign airlines, and focuses on mass-market adoption... 45

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 46

A lot has happened in the first quarter of 2010… Southwest finally set a schedule for installation… WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 47

A lot has happened in the first quarter of 2010… Southwest finally set a schedule for installation… OnAir and Panasonic became offerable on the A350… WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 48

A lot has happened in the first quarter of 2010… Southwest finally set a schedule for installation… OnAir and Panasonic became offerable on the A350… …and Aircell scored some more funding. WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 49

A lot has happened in the first quarter of 2010… Southwest finally set a schedule for installation… OnAir and Panasonic became offerable on the A350… …and Aircell scored some more funding. WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A …and Aircell is looking to provide video… And that opens up a whole new list of questions… …bandwidth…rights… …infrastructure… 50

51 WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A

In 2010, IMDC started to talk about ‘Operational Connectivity’ saying, ‘It’s not just about anymore…’ 52 WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A

In 2010, IMDC started to talk about ‘Operational Connectivity’ saying, ‘It’s not just about anymore…’ WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A Anticipating a ‘global connectivity explosion,’ new business initiatives began to take place… 53

In 2010, IMDC started to talk about ‘Operational Connectivity’ saying, ‘It’s not just about anymore…’ …and new standards and technologies began to offer the promise of faster speeds. 54 WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A Anticipating a ‘global connectivity explosion,’ new business initiatives began to take place…

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 55

Oman answered the question of whether broadband meant phone service or Internet service by saying, ‘We’ll have both, please.’ WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 56

Oman answered the question of whether broadband meant phone service or Internet service by saying, ‘We’ll have both, please.’ …and in the process of so doing, marked the real launch of SBB. WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 57

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 58

The stories just keep coming…. Alaska does an about face, leaving Row 44 at the alter for Aircell… While Alaska said Row 44’s service was “excellent” they also said that Aircell could install by year end…and for less money. So Alaska swapped coverage over water for quicker and cheaper installation. Is that a fair trade? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 59

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 60 AirlineInstalled AircraftLeft to be installed Delta/Northwest in 2010 American s & 150 MD80sPlans to begin installing 737 fleet Air Tran138Completed Virgin America28Completed United13Unknown US Airways-50 in 2010 Continental-21 in 2010 Alaska-Entire fleet—100+—in 2010 Southwest4530 from 2 nd quarter thru 2012 Air Canada2Evaluating trial results

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 61 AirlineInstalled AircraftLeft to be installed Delta/Northwest in 2010 American s & 150 MD80sPlans to begin installing 737 fleet Air Tran138Completed Virgin America28Completed United13Unknown US Airways-50 in 2010 Continental-21 in 2010 Alaska-Entire fleet—100+—in 2010 Southwest4530 from 2 nd quarter thru 2012 Air Canada2Evaluating trial results Here is the installation schedule among the North American carriers as of now.

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 62

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A Thales opens new Connectivity Suite in the UK, and Alan Pellegrini says, “Connected IFE is the new direction in the market.” 63

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A Thales opens new Connectivity Suite in the UK, and Alan Pellegrini says, “Connected IFE is the new direction in the market.” And Panasonic says five carriers will have eXConnect by year –end. 64

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 65

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A Where is Row 44 going after the Alaska announcement? To Africa where its WirelessG deal bears fruit in the form of a Mango. 66

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A Where is Row 44 going after the Alaska announcement? To Africa where its WirelessG deal bears fruit in the form of a Mango. OnAir likes Africa too… 67

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A ASiQ comes up with a low-cost alternative… And announces the world’s first Bluetooth Access Point for aircraft. 68

A journalist’s look at Connectivity in IFEC WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 69

WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A And Mr. Connectivity says that 2011 will be even more exciting! 70 Thales estimates that over 12,000 aircraft will be fitted with inflight connectivity in the next decade and that L-band satellite-based solutions will dominate the market.

The Business Model is still unclear Aircell controls the retail price Row 44 is paid by aircraft & splits secondary revenue Pax probably won’t pay except on long flights The technology platform is still unclear ATG L-Band, Ku-Band, Ka-Band OFDM Service level criteria are still unclear How fast must it be? What are the bandwidth requirements? The reception device of choice us still unclear Laptops Cellphones The relationships are still unclear Who partners with whom? What do Airbus & Boeing have to say? WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 71

A journalist’s look at Connectivity in IFEC The first shameless self-promotion of the day…. When it happens, read about it in WIN. WAEA Single Focus Workshop: Connectivity, March 25, 2009, Universal City, C A 72