United Will Offer SpaceX Starlink for Free on All Planes
United will add Starlink high speed internet to all of its passenger planes in 2025 and will offer free Wi-fi internet with streaming gaming to passengers. United will use high speed internet and entertainment as a competitive advantage. Starlink will make about $80-100 million per year providing this service. IF all other airlines need to match this offering then this will end up being about $2.5 billion per year for Starlink.
The exact financial details of the agreement between United Airlines and Starlink for in-flight internet services have not been publicly disclosed.
Major US carriers like American Airlines, Delta Air Lines, and United Airlines have been mentioned with fleet sizes in the range of 800 to over 1,000 aircraft each. Including other significant carriers like Southwest, Alaska, JetBlue, etc.,. The top US carriers collectively operate somewhere in the ballpark of 7,000 to 8,000 passenger aircraft.
China operates about 4000 passenger aircraft.
Asian non-China airlines about 2500 passenger aircraft.
European carriers about 3500 passenger aircraft
Middle east about about 1000 passenger aircraft
Others like South America and rest of world 3000 passenger aircraft
This is in the range of 25,000 passenger aircraft.
Cost Estimates from Industry Insights:
There have been mentions on platforms like X of costs for such services. For instance, an estimate suggested that the cost might be around $10,000 per month per plane, which would amount to $120 million annually for over 1,000 planes. However, United might have negotiated a bulk discount, potentially bringing the annual cost down to somewhere between $80-100 million/year.
Bulk Discount and Long-term Agreement: Given the scale of United's fleet, it's reasonable to assume that United would receive a significant discount for such a large-scale deployment. Long-term agreements often come with reduced rates, especially when they involve thousands of units.
Installation and Maintenance Costs: Beyond the monthly service fee, there would be costs associated with installing the necessary hardware on each aircraft, which might not be included in the monthly fee but would be a one-time or phased investment. Maintenance and upgrades of this equipment would also add to the overall cost.
Revenue Sharing or Other Models: Sometimes, such deals might not be purely about a straightforward fee but could involve revenue sharing, where Starlink might get a cut from any premium services United might offer using their connectivity or other indirect benefits like advertising or data services.
Strategic Value: For Starlink, providing service to United's fleet not only brings in revenue but also serves as a significant endorsement and advertisement for their technology. This strategic value might allow for more flexible pricing or other non-monetary benefits in the deal.
Annual Cost: Most likely about $80-100 million for the service alone, not accounting for installation.
Total Over Years: If it takes 5 years for full implementation, we're looking at a total cost potentially in the range of $400 million to $500 million, just for the service. This does not include one-time installation costs, which could add tens of millions more depending on the complexity and scale of the installation process.