Viasat Boosts In-Flight Connectivity With Honeywell Deal

Viasat, Inc. VSAT recently inked an agreement with Honeywell International Inc. HON to provide enhanced aviation services by adding its avant-garde VR-12T shipset to Honeywell’s Maintenance Service Plan (MSP). The strategic partnership will strengthen Viasat’s in-flight connectivity (IFC) solutions and enable Ku-band Advanced customers to enjoy high-speed Internet connectivity from takeoff to touchdown. Viasat’s Ku band solutions cover 90% of the top flight paths with seamless connectivity, thereby enabling aviation clients to reinforce their IFC investments and work with next-gen technologies for a better future. However, financial terms of the deal were not disclosed.

Known for its strength in defense and space businesses, Honeywell is a global diversified technology and manufacturing company with a wide range of aerospace products and services. Markedly, the Maintenance Service Plan is considered as one of the integral components of Honeywell’s business aviation segment. The plan focuses on delivering cost-efficient means to maintain assets optimally and provides tailor-made maintenance options for auxiliary power units and avionics components as well as propulsion.

With more than 40 years of proven expertise, Honeywell’s MSP eliminates financial uncertainty from future repairs and is believed to be the perfect solution for commercial helicopter operators who want to control their annual maintenance budget with the industry’s premier fixed-price protection plan. Its flexible coverage options maximizes aircraft dispatchability based on broad coverage of avionics and mechanical products. The latest partnership primarily focuses on enhancing Viasat’s Ku-band Advanced services which offers seamless Internet connectivity experience with speeds upto 10 Mbps. Apart from providing best-in-class onboard connectivity, the strategic agreement will enable Viasat’s Ku-Advanced customers to add their Ku system to the MSP contract. This will help aviation clients avoid unplanned maintenance costs and downtime.

Viasat maintains a leading position in the satellite and wireless communications market. Encouragingly, a blue-chip customer base, which comprises the Department of Defense, civil agencies, allied foreign governments, satellite network integrators as well as large communications service providers and enterprises, adds to its strength. The company’s Government Systems segment is a major profit churner. Moreover, the impressive traction of Viasat 1-bandwith — the company’s first communication satellite and the world's most cost-effective satellite bandwidth — has been supporting the government and satellite business. It also partnered with various cloud computing providers across the globe to embed AI and ML features through its secure, high-speed and resilient global satellite communications network and line of sight tactical network technologies.

With the surging popularity of high-engagement in-flight connectivity and high passenger engagement, leading industrial companies are scouting for new ways to utilize Viasat’s high capacity satellite solutions to maximize IFC investment and passenger satisfaction. The company’ impressive bandwidth productivity sets it apart from conventional and lower-yield satellite providers that run on incumbent business models. Consequently, steady contract flow from premier firms like Honeywell is a further testament to Viasat’s market dominance.

Viasat currently carries a Zacks Rank #3 (Hold). The stock has gained 5.1% compared with the industry’s growth of 30.9% in the past three months.

A couple of other better-ranked stocks in the broader industry are ADTRAN, Inc. ADTN and Calix, Inc. CALX, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ADTRAN’s bottom line surpassed the Zacks Consensus Estimate thrice in the last four quarters. The company has a trailing four-quarter positive earnings surprise of 8.5%, on average.

Calix’s bottom line surpassed the Zacks Consensus Estimate in the last four quarters. The company has a trailing four-quarter positive earnings surprise of 43%, on average.

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