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ViaSat, Eutelsat to Provide In-Flight Internet to Finnair

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Global broadband services and technology company, ViaSat Inc. (VSAT - Free Report) , with its long-time partner Eutelsat, is spreading its wings across the Atlantic, as it signed an agreement to provide in-flight Wi-Fi services with Finnair.

This follows a similar contract with EL AL Israel Airlines, which is currently in customer trials phase, and is scheduled to enter full retail service by the end of this year.

The Finnair Contract

The Finnair contract entails the installation of a high-speed wireless Internet network on the airline’s entire Airbus A320 series short-haul fleet flying in Europe. The installation will begin in May 2017, and is slated to finish by Jun 2018.

As the prime contractor to the airlines, ViaSat will supply its vertically integrated in-flight Internet system, which will include an end-to-end service that will leverage connectivity from Eutelsat. The connectivity service will leverage KA-SAT, Eutelsat’s high-capacity Ka-band broadband satellite.

With passengers increasingly valuing high-speed Internet during their flights these days, the ViaSat in-flight Wi-Fi system will allow Finnair to unlock greater value for its clients by enabling them to use their own device to engage with the Internet. ViaSat delivers download speed of 12 megabits per second, faster than most existing services. It also allows passengers to stream Internet video.

ViaSat’s Booming Wi-Fi Business

ViaSat has, till date, installed its system on about 500 commercial airplanes. This figure includes most of the United Continental Holdings, Inc.’s (UAL - Free Report) Boeing 737 fleet as well as the JetBlue Airways’ aircraft.

VIASAT INC Price and Consensus

 

VIASAT INC Price and Consensus | VIASAT INC Quote

ViaSat has been expanding its Wi-Fi business further. In June, the company secured a contract to provide internet access on 100 new American Airlines Group (AAL - Free Report) planes. ViaSat is also reportedly supplying Wi-Fi to Air Force One and other government aircraft.

Further, ViaSat recently inked a multi-year agreement with leading aerospace company, Dassault Aviation. Per the deal, ViaSat will equip the first Falcon 8X with its Ku-band terminal to deliver advanced Internet and corporate network access to operators. In addition, in February, ViaSat secured a deal to deliver Wi-Fi services to the domestic fleet of Qantas Airways.

Growth Prospects

We believe that the company’s significant contract wins will boost its leading position in end-markets, allowing it to gain a competitive edge over its peers.

ViaSat expects robust growth as it capitalizes on its competitive advantage and sturdy demand for its highly cost-effective satellite bandwidth products. The company projects strong growth opportunities in satellite services and government systems segments, which should drive top-line growth in the coming quarters.

ViaSat currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same space is Clearfield, Inc. (CLFD - Free Report) , holding a Zacks Rank #2 (Buy).

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