Briefing
- SpaceX's Starlink has now secured in-flight Wi-Fi agreements with American, United, Southwest, and Alaska Air, making it the dominant satellite internet provider across major U.S. Airlines.
- American Airlines will equip more than 500 narrow-body jets with Starlink service, with installations beginning in 2027.
- The American deal is the latest in a rapid commercial expansion by Starlink into aviation, displacing incumbent providers across the U.S. Carrier landscape.
- Competing in-flight connectivity providers face accelerating customer attrition as Starlink's low-earth-orbit network offers a coverage and speed advantage that legacy satellite systems cannot match on current hardware.
Analysis
- Incumbent in-flight connectivity providers face accelerating revenue attrition as Starlink now holds agreements with American, United, Southwest, and Alaska Air, covering the majority of U.S. narrow-body fleets. Viasat and Intelsat, which have historically dominated commercial aviation Wi-Fi, lose not just existing contracts but the renewal pipeline, since Starlink's LEO network advantage cannot be matched on legacy geostationary hardware without full infrastructure replacement. The displacement is structural, not cyclical.
- SpaceX's Starlink aviation business becomes a material revenue line ahead of any IPO, with four major U.S. carrier agreements covering hundreds of aircraft across the network. The Goldman Sachs-led SpaceX S-1 will now need to disclose aviation contract economics that were largely speculative in prior private valuations; confirmed multi-year recurring revenue from AAL, UAL, LUV, and ALK strengthens the bull case for the $1.25 trillion implied valuation and reduces the long-duration discount-rate risk flagged by prior analysis.
Historical Context
- 2020-2023
Viasat and Intelsat built dominant positions in commercial aviation Wi-Fi on geostationary satellite contracts. Intelsat filed for bankruptcy in 2020 partly due to structural overcapacity and pricing pressure; Viasat's ViaSat-3 satellite suffered a partial payload failure in 2023, already weakening its competitive position before Starlink's aviation push.
- 2010s
Gogo's air-to-ground network was displaced by satellite-based competitors as passenger bandwidth demand exceeded ATG capacity limits. The displacement cycle took roughly five years from early satellite trials to majority carrier adoption, a precedent for how quickly incumbents can lose aviation connectivity share once a superior technology achieves FAA certification.
Connected Events
Further reading
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