Despite the clear threat posed by Low Earth Orbit (LEO) and multi-orbit LEO/GEO inflight connectivity, Viasat continues to enjoy a growing backlog and a growing number of aircraft tails in service with its Ka-band satellite-powered inflight connectivity solution, as presently supported by geostationary satellites. And it has notably found a few capacity workarounds to the challenges posed by its delayed buildout of the ViaSat-3 constellation.
“As we focused on optimizing our capacity in the time before ViaSat-3 launches, we’ve uncovered a variety of opportunities to enhance our coverage, capacity and the performance we deliver to our customers,” company CFO Gary Chase said during the firm’s Q3 FY2025 earnings conference call.
Describing “tangible examples” of capacity optimization, Chase said, firstly, Viasat has reconfigured its ground network to allow cross-roaming between the Viasat and Inmarsat networks. “Among other things we should see a meaningful gain in the bandwidth we can offer our customers in business aviation at virtually no incremental cost to us and with no collateral impact on our existing customer franchises.”
In another example of this flexibility, as reported on RGN, Viasat customer STARLUX in the near term will rely on capacity from various owned and partner satellites in the Asia-Pacific region, including Viasat’s (formerly Inmarsat Global Xpress) GX6A payload for east Asian routes and ViaSat-3 F1 on transpacific routes entering that satellite’s coverage area, as it equips its fleet with Viasat’s GM-40 terminal solution.
“Second,” said Chase on the call, “we have an evolved path to secure targeted capacity from third parties that will reinforce some important coverage areas and enable more growth with better outcomes for our customers. When ViaSat-3 F2 and F3 enter commercial services, these purchases will offer continued and complementary support in some critical parts of our network. The changes reduce capex but more importantly enhance our ability to serve our broad and growing customer base for the long-term.”
As first revealed in an FCC filing, and as first reported by PaxEx.Aero, Viasat counts SES as a key partner, with the high-capacity SES-17 satellite and its Americas coverage part of the picture.
Viasat is, however, still in advanced discussions with Telesat for forthcoming Ka-band LEO-based Lightspeed capacity which would enable it to support a multi-orbit IFC solution in aviation. Management reckons it will have an agreement with Telesat “well in advance” of when the satellites are in service, in 2027.
The measures described by Chase are timely given that the ViaSat-3 constellation buildout continues to remain somewhat fluid. The firm faced on anomaly with its ViaSat-3 F1 satellite, resulting in dramatically reduced capacity. Yet, on US mainland-Hawaii routes, airlines and their passengers are benefitting from Viasat’s decision to point remaining F1 capacity at this mission. These success stories bode well for F2 and F3, once they are in orbit. But on that point, whilst management previously (in Q2 FY2025) expected that ViaSat-3 F3 for Asia-Pacific would launch in calendar 2025, and indeed before F2 for the Americas, it is now eyeing a schedule that would see ViaSat-3 F3 launch in early calendar 2026. ViaSat-3 F2 is expected to be in service for late calendar year 2025, per both previous and current guidance.
Viasat chairman and CEO Mark Dankberg explained the change in the F3 or Flight 3 schedule, noting that the Flight 3 manufacturing and test schedule outlook are unchanged from last quarter “but given our significantly increased coverage and capacity resources we’ve chosen a less capital intensive launch configuration that slightly extends the orbit raising time and will likely shift the in-service date into calendar 2026.”
Viasat posted a net loss of $158 million for Q3 FY2025, widening the loss of the year-earlier period. Revenue of $1.1 billion was flat year-over-year. Aviation service revenue increased approximately 12% year-over-year. But a strong operating performance in aviation services and indeed government satcom, space and mission systems, and tactical networking products was partially offset by declines in fixed services and other (FS&O), and maritime service revenues, management said.
New aviation awards are sufficient enough, however, to leave Viasat with a growing backlog of future installs. It ended the quarter with 3,950 aircraft in service, up about 130 sequentially and a contracted backlog of approximately 1570 aircraft, up about 60 sequentially.
“While we are confident in the growth outlook and the trajectory for aviation, our near-term results continue to be impacted by a slow recovery of OEM deliveries. As a result, we believe we’ll be a little below our prior target of 4,200 aircraft in service by the end of the fiscal year,” Dankberg said.
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Featured image credited to Viasat
