Gapping up
In reaction to earnings/guidance:
- SMCI +14.3%, FLGT +5.4%, SBNY +5.4%, SI +5.1%, CFG +2.4%, JBHT +2.1%, HOPE +1.4%, NHI +1.2%, FITB +1.1%
Other news:
- CMPI +325.7% (Regeneron Pharma (REGN) to acquire CMPI for $10.50/share in cash)
- AXSM +27.9% (received and agreed to Postmarketing Requirements/Commitments proposed by the FDA with respect to the New Drug Application for its AXS-05 product candidate for the treatment of major depressive disorder)
- GFF +8.8% (agreed to sell Telephonics Corporation to TTM Technologies [TTMI])
- BTAI +7.8% (strategic financing agreements by Oaktree Capital Management L.P. and Qatar Investment Authority)
- ZEN +6.4% (chatter circulates suggesting co has tapped an adviser for a sale process)
- PLUG +5.8% (to supply Walmart with green hydrogen to fuel retailer's fleet of material handling lift trucks)
- AVD +3.9% (files preliminary proxy statement; discloses receipt of director nominations from Cruiser Capital)
- GMAB +1.9% (Q1 net sales of DARZALEX (daratumumab))
- USAS +1.9% (reports Q1 consolidated attributable production totaled approximately 300000 silver ounces and 1274000 silver equivalent ounces)
- BGNE +1.7% (presents updated results from Phase 3 RATIONALE-309 Trial of PD-1 inhibitor tislelizumab in first-line RM-NPC; secondary survival endpoint findings were consistent with interim analysis)
Analyst comments:
- NWE +2% (upgraded to Equal Weight from Underweight at Barclays)
- LULU +1.7% (upgraded to Buy from Hold at Truist)
- CRH +1% (upgraded to Overweight from Equal Weight at Barclays)
Stellantis halts operations in Russia as it suspends remaining production
Carmaker’s move shows increasing difficulties maintaining operations in country as shipments are disrupted
Stellantis has halted operations in Russia as the car and truck manufacturer suspended remaining production at a plant south of Moscow because of problems obtaining parts.
The company, the latest to stop operations in Russia, said “the rapid daily increase in cross sanctions and logistical difficulties” prompted the move.
The group, formed last year through the merger of Peugeot owner PSA and Fiat Chrysler, had already suspended some of its business with Russia after the invasion of Ukraine.
This included imports and exports of vans and people carriers built at the Russian Kaluga plant for brands such as Fiat and Opel. Some of that production shifted to factories in Britain and France.
For Stellantis, hitting pause on the Kaluga operations, where it produced some 11,000 vans last year, only affects a small part of its overall operations.
But its latest step, affecting the remaining rump of its business for the Russian market, shows the increasing difficulties in maintaining operations in the country, even locally, as shipments of components are disrupted and western suppliers back away.
Car manufacturers globally had already run into problems sourcing semiconductors because of the coronavirus pandemic, which disrupted manufacturing and pushed up demand from industries competing for parts, such as electronics makers.
High-quality chips for cars will be particularly hard to source from within Russia, industry executives say, even if metal parts and other elements can be made locally.
France’s Renault, one of the carmakers most exposed to Russia through its local Avtovaz unit that makes Lada cars, has had to temporarily halt production at that division as it tries to build up stocks of electronic parts.
Renault has also indicated that it was prepared to walk away from its investment in Avtovaz, Russia’s biggest carmaker, although it has yet to outline concrete exit plans. Russia was previously responsible for 10 per cent of Renault’s entire sales,
A number of carmakers including Volkswagen and Ford said they were suspending operations or joint ventures right after Russia invaded Ukraine at the end of February, although few have outlined longer-term plans over how they will deal with those businesses.
Many are still paying employees in Russia, while activity is frozen, ratcheting up costs.
Stellantis said in a statement that it condemned violence and supported “all actions capable of restoring peace”.
It said it had it had suspended its manufacturing operations in Kaluga “to ensure full compliance with all cross sanctions” imposed by the EU, US and other countries, and to protect its employees.
Chief executive Carlos Tavares had played down the expected impact of a war on the company’s operations before the invasion. The company sold 2mn light commercial vehicles globally in 2021.
LG Energy signs $9bn EV supply chain deal in Indonesia
Electric vehicle battery maker leads consortium in mining-to-manufacturing push to reduce reliance on China
A South Korean consortium will invest $9bn in Indonesia to build a mines-to-manufacturing electric vehicle supply chain, as battery makers look to reduce their reliance on Chinese suppliers and mitigate commodity price rises following Russia’s invasion of Ukraine.
The group led by LG Energy Solution, the world’s second-biggest EV battery maker, has signed an agreement with local mining company PT Aneka Tamban (Antam) and Indonesia Battery Corporation.
The project will handle the entire battery production process including smelting and refining nickel, manufacturing precursors, cathode materials and cells, and assembling finished products in the south-east Asian country.
Indonesia is the world’s largest producer of nickel, with about 21mn tonnes of reserves, according to US Geological Survey data.
The deal comes as South Korean battery makers have increased investment in the chemicals and materials used in EV batteries to reduce their dependence on China, the world’s biggest processor of most of the minerals needed for production.
The war in Ukraine has added to the pressure to improve supply chain security. Russia accounts for 11 per cent of the world’s nickel production and prices of crucial commodities have increased significantly since the invasion.
The London Metal Exchange’s three-month nickel price has risen about 60 per cent this year to $33,175 a tonne as of April 14, increasing concern about the growing cost burden of battery makers.
The auto industry’s plans to pivot away from fossil fuel-powered vehicles has been complicated by its heavy reliance on refineries and factories in China, where about 80 per cent of battery materials are processed.
“The stable supply of raw materials has become much more important for battery producers amid the deepening crisis in Ukraine,” said Yoon Hyuk-jin, an analyst at SK Securities. “Korean battery makers need more of these upstream investments for their long-term competitiveness in order to reduce their reliance on Chinese materials.”
The consortium includes LG Chem, the parent group of LGES, steelmaker Posco, LX International, the commodity trader and miner, and Chinese company Zhejiang Huayou Cobalt.
“We expect the project to improve our battery business capability and profitability by securing competitive raw materials in a stable manner,” LGES said.
The company is also building a $1.1bn battery cell plant in Karawang Regency, 65km south-east of Jakarta, as part of a joint venture with Hyundai Motor group.
The consortium’s investment was announced days after China’s Contemporary Amperex Technology (CATL), the world’s biggest EV battery maker, signed a $6bn deal with Indonesian companies including Antam to produce a similar project.
Early premarket gappers
- Gapping up:
- SMCI +12.4%, GFF +8.8%, FLGT +7.6%, ZEN +5.6%, PLUG +3.8%, HOPE +2.9%, CFG +2%, PL +1.9%, EE +1.7%, BGNE +1.7%, APO +1.6%, SBNY +1.5%, EFC +0.5%
- Gapping down:
- NTGR -11.4%, ACAD -7.7%, PNFP -6.3%, NHI -2.9%, ACHR -2.8%, FNB -1.8%, RVP -1.7%, GSK -1%, ELS -0.8%, TWTR -0.6%, AMGN -0.5%
Has private market rulemaking backfired?
SEC commissioner Crenshaw thinks the boom is not helping companies, and might be hurting investors
Private markets are hot. Really hot. That’s raising a host of thorny questions, as SEC commissioner Caroline Crenshaw highlighted in a speech last week.
It’s worth skimming for the array of eye-catching factoids that Crenshaw presented to the University of Chicago’s Booth School of Business on April 14; such as how private market fundraising has trebled over the past decade to a record of almost $1.2tn last year, or how public markets have atrophied to the extent that the Wilshire 5000 index now only has about 3,500 members.
But for the US Securities and Exchange Commission, the big questions are whether this private market boom is really “facilitating capital formation” — to use its favourite phrase — and whether the interests of American investors are truly being served. As Crenshaw said:
My ever-present fear is that the capital formation rules that we put in place pay lip-service to the needs of everyday American entrepreneurs, but really serve another master. And because of the less stringent disclosure requirements in private markets, they do that at the expense of actual, substantive, meaningful disclosure to investors, stakeholders and regulators.
There’s an inescapable conflict between broadening smaller businesses’ access to capital and protecting investors from dodginess. In recent years, regulators have been mostly concerned about the dearth of companies going public, so they have attempted to ease the burden of being listed, while also broadening access to private markets.
In August 2020 the SEC expanded its definition of an “accredited investor”, and three months later passed another rule nattily named “Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets.”
The understandable concern was that many of the juicy gains that private companies have made in recent years are primarily accruing to venture capitalists and their well-connected wealthy investors.
But Crenshaw is sceptical whether these efforts have actually done much to improve access to capital OR protect investors in private markets. In particular, she fears that lighter disclosure and compliance enjoyed by private companies is just shifting costs and risks on to investors and markets. Two excerpts from her April 14 speech:
. . . The influx of capital to the private side of the industry, coupled with the severity and frequency of misconduct that our agency is uncovering (even with the limited information we are able to collect) suggests to me that our recent rulemaking may not have been the right approach to serve our goals. The incomplete visibility that we have into the private markets tells me that we need more information to regulate and to ensure every American can adequately save for their children’s education and their own retirement. Quite simply, we need more insight, more education, indeed more data, to be able to effectively protect investors, before the big frauds occur.
. . . Unicorns may prefer not to provide the kind of insights into their businesses that publicly traded companies have to disclose, but the result is less public data about what is actually working and what is, instead, just shifting burdens to those less able to bear them. So I am concerned that not only are we not advancing access to capital for the businesses that could most benefit, but also that the present system does not provide standardised disclosure that all investors can rely on for decision-making, reporting frameworks that form the basis of corporate accountability, and the industry data we need as regulators to inform our decisions.
The private capital boom is clearly a big topic at the SEC. Fellow commissioner Alison Herren Lee last year raised some pertinent issues in a big speech on the subject. Earlier this year the SEC’s Division of Examinations put out a “Risk Alert” highlighting worries around private fund managers, such as misleading track records. Dodgy valuations and outright frauds are another worry. Chair Gary Gensler also has private markets in his sights.
Here are, for reference, the questions that Crenshaw posed to the academics at Chicago:
- Where are retail investors putting their funds and are there adequate protections in place?
- What are the full, systematic implications of the increasing size of our private markets, and of having so many so-called Unicorns? Are there unforeseen implications when Unicorns do go public, including how they might utilise their privately accumulated capital to influence the IPO process and their governance structure?
- What are the barriers to accessing public markets today, and how can we alleviate such barriers without eroding investor protections and increasing the already large information asymmetry?
- Should we be taking immediate steps to better protect employee-investors of private companies, who are particularly vulnerable to liquidity and valuation challenges accompanying private companies?
- Are there minimum corporate governance and code of ethics standards that should apply to all companies, public and private?
- Are there other areas of our exempt offering framework that could be improved or better calibrated? For example, Regulation D and the Accredited Investor definition?
- Should we revisit the rules under Section 12(g) of the Exchange Act?
Like Crenshaw, Alphaville has more questions than answers. But we know this is going to be a wildly important debate to follow in the coming years. If you have any good responses to the above then leave them in the comments below.
Stocks in Asia were mixed Tuesday with investors weighing Chinese measures to support the economy and the prospect for faster Federal Reserve policy tightening to fight inflation.
Equities were modestly higher in Japan, aided by a sinking yen. Hong Kong technology names declined on ongoing concerns over regulation. China dropped as investors assessed measures to tackle economic headwinds from Covid-led lockdowns. U.S. futures gained after stocks ended little changed Monday. European contracts fell.
Treasury yields steadied after the long end declined Monday. St. Louis Fed President James Bullard said that rate increases of 75 basis points -- while not the base case -- shouldn’t be ruled out as the central bank needs to move quickly to combat inflation.
The yen extended its longest losing streak in at least half a century, falling past 128 per dollar, as the comments underscored a widening gap between U.S. and Japan rates. Australian bond yields jumped. The central bank hinted rates may rise sooner due to quicker inflation and a pickup in wages growth. The dollar extended an advance.
Macro :
- Banks Pile Up Big Misses on Underwriting Revenue: ECM Watch
- Altcoin Monero Surges as Owners Set Withdrawal From Exchanges
Keep an eye on :
- AMBUB DC : Ambu Expands Access to Over 1 Mln Procedures in ENT Segment
- AZN LN : Amoydx, AstraZeneca Sign Pact for Programs in China, EU, Japan
- BAMI IM : Cred Agricole Made Bid for Banco BPM Insur. Business: Repubblica
- BN FP : Danone 1Q Sales Growth Seen Boosted by Bottled Water: Preview
- EDP PL : EDP Renovaveis 1Q Electricity Generation Rises 14% Y/y
- GBLB BB : GBL Agrees to Buy Majority Stake in Affidea From B-FLEXION (1)
- IDEA LN : Software Company Ideagen Awaits Cinven Approach: The London Rush
- I2PO FP : Pinault, Partners Set to Buy Deezer in a $1.1 Billion Deal
- LHA GY : MSC-Lufthansa Favored Bidder for ITA Airways: Corriere
- MAP SM : Mapfre Says Total Premiums Grew 10.9% in the First Quarter
- TL5 SM : Mediaset Espana Hires Citi to Assess MFE’s Bid: El Confidencial
- RFAST SS : Stenhus Offers to Buy Randviken for SEK2.71b in Cash and Shares
- GLE FP : SocGen Unveils New Domestic Retail Branding Strategy
- STLA IM : Stellantis Suspends Production in Russia
- TIT IM : Telecom Italia Sells Inwit Stake: EMEA TMT Premarket
- TSLA US : Tesla Investor Trial Over 2018 Go-Private Tweet Set for Jan. 17
- TWTR US : An Apollo-Musk Twitter Offer Is Cold Water on Higher Bids: React
>>> Up
* CRH Raised to Overweight at Barclays; PT 44 euros
* Prudential Raised to Buy at SocGen; PT 1,375 pence
* Technip Energies Raised to Buy at SocGen; PT 20 euros
* Virbac Raised to Outperform at Oddo BHF
* Wizz Air Raised to Buy at Peel Hunt; PT 4,700 pence
>>> Down
* 888 Cut to Hold at Numis; PT 230 pence
* ASML ADRs PT Cut to $750 from $975 at Wells Fargo
* Atlantia Cut to Neutral at Grupo Santander; PT 23.74 euros
* BasWare Cut to Hold at Nordea
* Elior Group Cut to Hold at Deutsche Bank; PT 3.10 euros
* Getlink Cut to Hold at HSBC; PT 16.40 euros (yesterday)
* Grenergy Renovables Cut to Equal-Weight at Barclays; PT 40 euros
* Holcim Cut to Equal-Weight at Barclays; PT 45 Swiss francs
* Moneysupermarket Cut to Hold at Investec; PT 180 pence
* SSP Cut to Hold at Deutsche Bank; PT 265 pence
* Volvo Cars Cut to Hold at Nordea
>>> Initiation
* IntegraFin Rated New Hold at Shore Capital
>>> Call
* Carrefour Well Positioned for Inflation, Berenberg Upgrades (1)
* Elior, SSP Downgraded at Deutsche Bank on Macro Risks, Inflation
* Hermes PT Increased at Bryan Garnier After ‘Impressive’ 1Q
* ITV Downgraded to Sell at Berenberg on Weaker Advertising Demand
* Randstad Upgraded at Exane BNP and Preferred to Adecco
* Solaria, Grenergy Downgraded at Barclays After Shares Rally
* THG PT Cut at Jefferies; Outlook Will Be in Focus at FY Results
* Wizz Air Cut to Reduce at HSBC on Fuel Cost Disadvantage
Rivian CEO Warns of Looming Electric-Vehicle Battery Shortage
Much of the battery supply chain isn’t built, challenging an industry aiming to sell tens of millions of EVs in coming years, RJ Scaringe says
NORMAL, Ill.— Rivian Automotive Inc. RIVN -5.81% Chief Executive RJ Scaringe is warning that the auto industry could soon face a shortage of battery supplies for electric vehicles—a challenge that he says could surpass the current computer-chip shortage.
Car companies are trying to lock up limited supplies of raw materials such as cobalt, lithium and nickel that are key to battery making, and many are constructing their own battery plants to put more battery-powered models in showrooms.
“Put very simply, all the world’s cell production combined represents well under 10% of what we will need in 10 years,” Mr. Scaringe said last week, while giving reporters a tour of the company’s plant in Normal, Ill. “Meaning, 90% to 95% of the supply chain does not exist,” he added.
The CEO’s comments are the latest alarm bell to go off across both the auto and battery sectors with executives worried that the fast-rising demand for electric-vehicle parts and a shortfall of critical materials and production could result in an acute supply crunch.
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For instance, Tesla Inc. CEO Elon Musk earlier this month tweeted that lithium prices have “gone to insane levels” and that Tesla “might actually have to get into the mining & refining directly at scale.”
Mr. Scaringe put a sharper point on the problems for the auto industry ahead, saying building enough batteries will be among the biggest hurdles in trying to boost electric-vehicle sales from a few million today to tens of millions within the decade. The shortages will occur everywhere from the mining of raw materials, to processing them, to building the battery cells themselves, he said.
Already, demand for lithium-ion batteries, which are the core power source for electric vehicles, has surged to 400 gigawatt hours in 2021—up from 59 gigawatt hours in 2015—and it is expected to jump another 50% in 2022, according to Benchmark Mineral Intelligence, which tracks the battery supply chain.
The semiconductor shortage that is disrupting the auto industry was a relatively small supply-demand imbalance that then led to aggressive overbuying and stockpiling, putting the car sector in the difficult position it is in now, Mr. Scaringe said. With batteries, the problem is expected to be an order of magnitude worse, he added.
“Semiconductors are a small appetizer to what we are about to feel on battery cells over the next two decades,” Mr. Scaringe said.
Rivian, RIVN -5.81% a California-based startup focused exclusively on selling electric trucks and SUVs, has spent the past several months working to spool up production at its vehicle-making factory in Normal. The company began selling its first models last fall—the R1T truck and R1S SUV—and said reservations for the two were around 83,000 in early March. The company sold a total of 1,227 vehicles in the first quarter of this year.
Investors are closely tracking Rivian’s ability to execute on its manufacturing plans, following an initial public offering last year that raised nearly $12 billion in proceeds and briefly pushed the startup’s valuation above that of Ford Motor Co. and General Motors Co.
Rivian’s success is dependent on how quickly it can ratchet up production and boost sales revenue, a task made more difficult by its newcomer status and lower starting volumes. Parts suppliers tend to give preference to large, more-established car companies that place big bulk orders and have a record of meeting their own targets on factory output, analysts and industry attorneys say.
The race to secure raw materials is growing increasingly competitive, in part because they are becoming more costly for battery makers. Raw materials account for 80% of the cost of a lithium-ion battery, up from 40% in 2015, according to Benchmark. Materials for the battery cathode, such as lithium, cobalt and nickel, have collectively gained about 150% in the past year, including 25% to 30% in the past month, according to Benchmark.
The demand is coming from other sectors, too, with clean-energy companies looking to build more batteries to store power from sources, such as wind and solar, analysts say.
The Biden administration is adding to pressure from the clean-energy industry by pushing for less dependence on fossil fuels, and earlier this year invoked the Defense Production Act to boost U.S. production of materials used in rechargeable batteries to curb American reliance on China for key ingredients.
Rivian’s share price has slumped in recent months, due in part to manufacturing setbacks related to the semiconductor shortage and other problems getting automotive parts. Rivian’s stock closed at $38.23 Monday, down nearly 51% from the IPO price of $78.
In March, Rivian said it was sharply curtailing factory output this year, cutting its forecast to 25,000 vehicles—about half of what it could have built if it weren’t for constraints on getting parts and materials.
The car company’s 3.3 million-square-foot factory has the capacity to build 150,000 vehicles a year but currently isn’t running a full five-day week. In December, Rivian said it would add a second assembly factory in Atlanta, starting construction next year. That plant is expected to begin production in 2024.
Mr. Scaringe said the company plans to build a smaller, compact SUV called the R2 at the Atlanta plant that will help broaden Rivian’s buyer base.
The production line at the Normal plant—a former Mitsubishi Motors Corp. factory that Rivian purchased in 2017—demonstrates the stakes for the upstart car maker.
In addition to building trucks and SUVs, Rivian plans to produce an electric van at the factory for Amazon.com Inc.
Amazon, an investor in the startup, has a deal to buy 100,000 battery-powered delivery vans.
Other auto executives are also growing concerned about constraints in the battery supply chain. Some companies, such as GM, are joining with mining firms to secure access to critical ingredients such as cobalt and lithium. Others are bringing more of their battery-cell production in-house, aiming to have more control over this core component for electric vehicles.
Still, even with all the planned battery production expected to be added, less than half of the forthcoming factories will produce cells with sufficient quality to supply global car companies such as GM, Toyota Motor Corp. and startups such as Rivian, according to an analysis by Benchmark.
“It varies by region, but it’s important for people to understand that capacity isn’t a quality, reliable battery supply,” said Simon Moores, Benchmark’s chief executive.
Mr. Scaringe said Rivian’s strategy for securing battery cells is diversification. It also plans to structure the deals with partners as co-investments in dedicated capacity and intends to eventually develop and build cells internally, he added.
“We are not going to have a single supplier,” he said. “We are going to have multiple suppliers.”
Delta Air Lines Tested SpaceX’s Starlink Internet for Planes, Delta CEO Says
Starlink, part of Elon Musk’s space company, aims to provide broadband to airlines as it pushes to reach business clients
Elon Musk’s satellite-internet business is pushing to provide wireless internet on airplanes—long a source of frustration among travelers—with at least one major carrier, Delta Air Lines Inc., DAL -0.54% testing the offering.
The Atlanta-based airline has held talks with SpaceX’s broadband unit, called Starlink, and conducted exploratory tests of Starlink’s technology, Delta Chief Executive Ed Bastian said in a recent interview. He declined to discuss specifics.
Space Exploration Technologies Corp., the formal name for Hawthorne, Calif.-based SpaceX, didn’t respond to a request for comment.
Mr. Musk’s SpaceX has been building out Starlink over the past several years by blasting internet satellites into the lower reaches of orbit and selling broadband services to businesses and consumers. Mr. Musk said in a tweet last year that the unit was focused on getting certified for Boeing Co. BA -1.15% 737 and Airbus SE’s A320 planes, “as those serve [the] most number of people.”
Analysts forecast growing demand for Wi-Fi on jetliners, despite complaints about reception and speeds from some passengers over the years. The number of connected aircraft could more than double to as many as 20,000 by the end of the decade, according to Euroconsult, a consulting firm that focuses on the satellite industry.
Satellite-communications companies such as Intelsat SA and Viasat Inc. already have businesses connecting thousands of planes. Dave Bijur, Intelsat’s senior vice president for commercial aviation, said many airlines are looking for ways to offer high-quality broadband on flights without adding too much weight in the form of antennas or high costs.
“A lot of airlines want to offer streaming-quality services” to their customers, he said.
Mr. Bastian, the Delta CEO, has previously criticized the internet service available on many flights and said for years that in-flight internet should be fast and free. Delta has sought to position itself as a premium service for high-end corporate travelers, who expect to be able to connect wherever they go. The airline did a test run offering free internet on some flights before the Covid-19 pandemic.
Jonathan Hofeller, a vice president focused on commercial sales at Starlink, said at a conference last month that Starlink believes in-flight internet is ripe for an overhaul.
“The expectation has changed faster than the technology,” Mr. Hofeller said, adding Starlink had 250,000 subscribers, including consumers and enterprise clients.
SpaceX has pitched Starlink as a major business opportunity, several years ago forecasting the unit would have more than 40 million subscribers by 2025. The company is seeking Federal Communications Commission approval to deploy over time another 30,000 Starlink satellites, but the National Aeronautics and Space Administration has said it is concerned about traffic congestion and potential collisions. SpaceX has said it has adopted a careful approach to protect orbits near Earth.
The FCC has granted SpaceX permission to test Starlink for aircraft, a filing shows. Meanwhile, the Federal Aviation Administration must certify satellite-internet equipment installed on commercial aircraft, according to an agency spokeswoman. The FAA won’t comment on any ongoing certification efforts, she said.
Rivals Argue Musk’s Starlink Satellites Are Overcrowding Space
SpaceX’s Starlink faces safety complaints from China and rival companies. As Elon Musk says there’s plenty of room in space and the race to expand satellite internet networks ramps up, WSJ looks at the risks they could pose. Photo Illustration: Sharon Shi
Besides regulatory approval, Starlink faces other potential hurdles to win business with airlines. Carriers typically have long-term contracts with Wi-Fi providers and would need to schedule time to have the permitted Starlink equipment installed on existing planes, said J. Armand Musey, founder of Summit Ridge Group, a consulting firm focused in part on the satellite industry.
“This is a several-year process to get significant market share,” he said.
Existing providers are also working to improve their service. Viasat, which counts Delta as a customer, said in February that it had three high-capacity satellites under construction. Those satellites would boost its service for commercial airlines and other customers, the company has said. The first of the three satellites is launching later this year, a Viasat spokeswoman said.
Delta has been rolling out satellite-internet service on its mainline jets, and last month said more than 300 aircraft had been equipped with Wi-Fi powered by Viasat. That option costs passengers $5 a flight, the airline has said.