Thesis (S.M.)--Massachusetts Institute of Technology, System Design and Management Program, 2007. / Includes bibliographical references (p. 70-72). / The purpose of this thesis to evaluate the opportunity for service provider entry and of the airborne internet, to analyze the disruptive impact technology used by AirCell and AeroSat has had on the development of an airborne internet, and to identify various stake holders and their value propitiation. The airborne internet has the potential to change the way we fly and spend time when sitting in the plane. In the last fifty years, there has not been much technological advancement in the air traffic control system. Airplane operation still depends on current ground control and radar systems that are very expensive and very difficult to scale. These technologies are also heavily dependant on humans. There have been many technological advancements out side of the aviation industry. Establishing an airborne internet is a tremendous opportunity for everyone. With the help of an airborne Internet, each plane can transmit its identity, location, and also direct video footage that will help Homeland security fight against terrorism. The airborne internet has the ability to connect airplanes not just via a computer on the ground (or via satellite) but directly with each other, relaying information from other planes in an Internet-like fashion. The airborne internet is strongly supported by the Pentagon, FAA and NASA. The U.S. Air Force and FAA are working on defining the architecture of an airborne network and hope to begin actively developing and testing the network itself between 2008 and 2012. According to the FAA, in 2005 there were 10 million flights carrying a total of 660 million passengers in the United States. For the FAA there are a number of merits to working with an airborne internet service provider to continue tests and validate the technical and economic feasibility of an airborne internet. / (cont.) First, there appears to be a substantial market -- in the range of $1b -- for services that require internet connectivity on the air for the commercial airline, air cargo, business jet, and general aviation sector. Second, current alternatives such as satellite solutions and existing air-to-ground solutions fail to meet all the needs of the mass market. Satellite solutions provided by companies such as Inmarsat, Iridium, and Globalstar are priced at a premium and carry an expensive cost structure from the maintenance and investment in orbiting satellites. Airborne Internet service can be offered through three different technologies first, a satellite solution offered by Boeing; second, air-to-ground systems provided by companies such as AirCell; and third, a network of airplane ground -to - air system like AeroSat, all of which are compatible with the planned FAA architecture. Boeing's model is prohibitively expensive; a business model for an airborne internet solution based on a South West Airlines type low cost approach may make an airbome internet more feasible The model would rely on low service fees to promote greater consumer usage, high capacity utilization of ground stations to promote margins, low aircraft equipment costs to help cash flows, and risk/reward sharing with airlines to promote aircraft operator adoption. Assuming that a service provider relied on revenue from non-FAA related services, it could still generate ample margins to support other general FAA applications behind the scenes. The FAA can demonstrate overall support for an airborne internet vision, help attract key players to the ecosystem needed to implement the system, promote usage, and drive required airline ROI. The FAA could also drive the implementation of industry standards required to eventually ensure globally consistent services. / (cont.) However, even with these clear benefits, there are a few key risks that need to be considered and further evaluated. First, this analysis evaluated the economic feasibility of an airborne internet. It does not take into consideration testing or validating the potential network performance from AeroSat's innovative mesh approach in an actual pilot test. Second, more extensive demonstrations will be required to further validate performance and the related cost for the supporting infrastructure. Some key economics like the number of antennae required on aircraft as the network grows should be explored in greater detail after initial simulations. Finally, uncertainty over potential developments of spectrum-free solutions, evolutes of ultra-wideband with potentially disruptive cost structures, could slow the market from adopting a spectrum-based solution. Although this is unlikely given the FAA's current stance on the use of UWB, the issue is worth further research and conversations with the FAA. Accordingly, continued testing, development, and analysis to test feasibility and clarify the key unknowns is recommended. There are a few areas that deserve special attention. First, the target customer composition required to drive the business model should be finalized. The reliability and performance of the mesh-approach is partly dependent on the density of airtraffic in relation to the location of installed ground stations. Second, spectrum requirement issues, including the cost of acquisition and regulatory compliance, need clarification as they strongly impact the business model. Third, the potential magnitude and variability of assumed revenue sources, as well as the timing of cash collections across key customer segments, should be explored. / (cont.) Both of these impact the assumed free-cash-flows generated by the potential business model. Finally the potential terms of airline risk/reward sharing contracts required to equip aircraft with different quantities and types of antennae, need further exploration. Air carriers seem to be moving away from models where they absorb all of the equipment/certification costs - the economic feasiblity of a potential service provider depend on the service provider's ability to offer airlines this service at a reasonably good rate. / by Anand Bhadouria. / S.M.
| Identifer | oai:union.ndltd.org:MIT/oai:dspace.mit.edu:1721.1/42349 |
| Date | January 2007 |
| Creators | Bhadouria, Anand |
| Contributors | Mary Tripsas., System Design and Management Program., System Design and Management Program. |
| Publisher | Massachusetts Institute of Technology |
| Source Sets | M.I.T. Theses and Dissertation |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | 72 p., application/pdf |
| Rights | M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission., http://dspace.mit.edu/handle/1721.1/7582 |
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