Viasat (VSAT) to Power IFE Connectivity in Malaysia Airlines
Viasat Inc. VSAT has secured a prime contract for Ka-band satellite in-flight entertainment (IFE) solutions from Malaysia Airlines for an undisclosed amount. The IFE services will aim to offer enhanced Internet capabilities with best-in-class in-flight entertainment options and likely contribute to the uptrend in leisure air travel demand.
Per the deal, Malaysia Airlines — the national carrier of Malaysia — will use Viasat’s Ka-band IFE solutions in its new Boeing 737-8 fleet. The solutions will enable high-quality, high-speed Internet and video streaming services on the personal electronic device of users to make air travel more digitally accessible and seamless. Passengers will gain access to more than 500 on-demand entertainment options and personalized shopping experiences.
Viasat’s Ka-band solutions enable business jet customers to enjoy high-speed Internet connectivity from takeoff to touchdown. It empowers aviation clients to reinforce their IFC investments and helps customers stay connected with smooth web browsing and streaming services. Equipped with unrivaled speed and quality, Viasat’s Ka-band service has been specifically designed to meet accretive demand for data backed by next-gen business applications. The Ka-band leverages global bandwidth to provide avant-garde Internet service with best-in-market pricing to boost the competitiveness of the business jet market.
The surging popularity of high-engagement IFE solutions has compelled leading airline companies to scout for new ways to utilize Viasat’s high-capacity satellite solutions to maximize passenger satisfaction. The company’s impressive bandwidth productivity sets it apart from conventional and lower-yield satellite providers that run on incumbent business models. With an advanced level of Internet connectivity, Malaysia Airlines will offer customers an opportunity to stream all types of video content and seamlessly access Wi-Fi aboard. In addition, it is likely to sow the seeds for future entertainment enhancements and personalization on customer seatback screens.
Viasat’s Satellite Services business is progressing well, with key metrics including steady growth of average revenue per user (ARPU) and revenues showing impressive growth. ARPU is growing on the back of a solid retail distribution network, accounting for a rising proportion of high-value and high bandwidth subscriber base. Further, the growing adoption of in-flight Wi-Fi services in commercial aircraft like Malaysia Airlines is benefiting the business.
The stock has lost 22.4% in the past year compared with the industry's decline of 23.3% in the same period. Nevertheless, we are impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock.
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