Sky High Economics Report: 3 Ways the Connected Aircraft Can Save Airlines $15B Annually

Connected Aircraft

The connected aircraft has the potential to save airlines $15 billion annually in operational efficiencies according to the second installment of the Sky High Economics: Evaluating the Economic Benefits of Connected Airline Operations report. The study was released this week at APEX Tech 2018, and follows the first installment, which focused on passenger connectivity.

Airlines looking to connect their fleets need to make a business case for such a large investment. This research, which will include three installments in total, was conducted to help airlines understand the market opportunity and transformational impact on airline operations, according to Frederik van Essen, Senior Vice President, Market and Business Development, Inmarsat Aviation.  “It is important to take a holistic approach to connectivity,” he told us in a recent interview. Frederik went on to say that as airlines move away from outdated processes, they will benefit from the dynamic nature of connectivity and see much more operational efficiencies across the airline.

The operational savings outlined in this recent study, based on research from the London School of Economics and Political Science (LSE) in partnership with Inmarsat, comes from the efficiencies of the connected aircraft, including fuel savings, predictive maintenance, air traffic management enhancements and more.

“The forecast doubling of aircraft in the skies by 2035 will create both challenges and opportunities for the global aviation industry. IP-enabled aircraft are an essential step in facilitating growing demand for air travel, while meeting vital safety requirements,” said Dr. Alexander Grous (B. Ec, MBA, M.Com, MA, PhD.), Department of Media and Communications, LSE and author of Sky High Economics.

The second installment of the report offers three main ways that connectivity will transform airline operations:

Better Intelligence, Greater Efficiencies

Connected aircraft rely on IP-enabled communications, which offer real-time, accurate weather information to the cockpit, allow for greater flight optimization, and can result in one percent of fuel burn reduction per flight. According to the study, that equals $1.3B in fuel costs savings each year, based on current rate for fuel.

Connected Aircraft

Predictive Maintenance and Real-Time Data

Currently, airlines spend $62.1 billion in maintenance, repair, and operations costs globally based on data collected in 2016. According to this latest research, these costs are expected to grow to $90 billion by 2024. However, maintenance costs can be cut nearly in half by leveraging real-time data to create a live electronic tech log and allow flight performance data to be integrated with maintenance suppliers. According to the Sky High report, by using advanced algorithms, maintenance requirements can be predicted before the aircraft arrives, which could results in a cost savings of $5.6 billion annually by avoiding unplanned maintenance with a connected aircraft.

Connected Aircraft

Innovating Air Traffic Management

Connectivity is changing how data is managed and allowing for more innovative air traffic management to make more efficient use of the airspace. “Enhanced connectivity is becoming an operational necessity as our skies become busier,” says van Essen. “There is an extra layer of granularity that is needed with the increase of aircraft traffic in addition to drones, flying taxies and shuttles.” As the airspace gets busier, airlines need to consider how to leverage technology to accommodate both aircrafts and passengers.

Innovative air traffic management could save $3 billion each year by enabling secure, real-time data exchange between the connected aircraft and air traffic control. According to the report, by moving to satellite-based navigation, automating aircraft position reporting, and providing digital datalink communication between pilots and air traffic controllers, this would accommodate more aircraft in the sky, offer more direct flight routes, and minimize delays.

Connected Aircraft

“Connectivity will enable digital transformation in airlines,” van Essen tells us. This digital transformation will allow the airlines to reduce operational costs by several points and “this transformation will be a fundamental shift in the industry.” The technology is already there.

The third installment of the Sky High Economic report is expected out before the end of 2018 and will focus on customer loyalty and its impact on the airlines business. To download the current installment about the connected aircraft, go to: