Gilat Gains on Boeing Connectivity Deal for In-Flight Broadband
0h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
gilatboeingin-flight-connectivity
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Shares of Gilat Satellite Networks Ltd. traded higher on 19 May 2026 following confirmation of a new in-flight connectivity supply agreement with Boeing. The deal positions Gilat as a key technology provider for the aerospace giant's commercial aviation broadband systems. As of 12:43 UTC today, Boeing's stock was trading at $220.61, down 3.75% for the session. The agreement between the two firms is a direct challenge to existing market leaders and reshapes the competitive landscape for airborne internet services. Investing.com first reported the development earlier today.
The in-flight connectivity market is projected to exceed $10 billion annually by 2030, driven by passenger demand for smooth broadband. Boeing's move to partner with Gilat arrives during a period of intense competition for airline retrofit contracts. Rivals Viasat and Intelsat have dominated recent procurement cycles for major U.S. and European carriers. The last major shift in supplier dynamics occurred in 2024 when Panasonic Avionics secured a $1.2 billion exclusive deal with a European airline consortium. The current macro backdrop features elevated capital expenditure budgets from airlines rebounding from post-pandemic travel slumps, with many carriers prioritizing passenger experience upgrades. The catalyst for Boeing's partnership appears to be Gilat's recent technological breakthrough in electronically steered antenna arrays, which offer lower weight and power consumption than legacy mechanical systems. This technical edge allows for higher data throughput at a lower total cost of ownership for airlines.
The deal's announcement provided a clear catalyst for Gilat's equity, which had been trading in a narrow range for the prior three months. Boeing's stock, a component of the Dow Jones Industrial Average, showed a decline of 3.75% to $220.61, underperforming the broader SPX index. The aerospace giant's shares traded between $216.79 and $221.16 during the session. Gilat's market capitalization before the news was approximately $450 million, a fraction of Viasat's $3.1 billion valuation. The in-flight connectivity sector has seen average annual revenue growth of 14% over the last five years, according to industry reports. Specific financial terms of the Gilat-Boeing agreement were not disclosed, but similar long-term supply deals in this sector typically range from $200 million to $800 million in total contract value. The partnership is structured as a multi-year agreement covering hardware and software for Boeing's next-generation satellite communication terminals.
| Metric | Boeing (BA) | Sector Benchmark (SPX) |
|---|---|---|
| Price | $220.61 | N/A |
| Daily % Change | -3.75% | +0.2% (approx.) |
| Session Range | $216.79 - $221.16 | N/A |
The immediate second-order effect is negative for incumbent suppliers Viasat and Intelsat, which face increased pricing pressure and market share erosion. Shares of Viasat dropped 2.1% in pre-market trading following the news. Aerospace subcontractors like Astronics and CPI Aerostructures, which manufacture competing terminal components, may see reduced order volumes. Conversely, semiconductor firms supplying Gilat's modem chips, such as Analog Devices, could see incremental upside. A key limitation to the bullish thesis for Gilat is execution risk, as scaling production to meet Boeing's global supply chain demands presents logistical challenges the smaller company has not previously faced. A counter-argument suggests Boeing's primary motivation may be to diversify its supplier base and secure better pricing rather than a wholesale technology shift. Positioning data indicates short interest in Viasat had risen to 12% of float in the weeks preceding the announcement, while hedge fund flow into the satellite communication ETF SATX showed increased accumulation of small-cap names like Gilat.
The next major catalyst is the Paris Air Show in late June 2026, where Boeing and Gilat are expected to showcase the first integrated terminal prototype. Airlines will begin formal evaluation and procurement processes in the third quarter of 2026. Gilat's next earnings report on 5 August 2026 will provide the first financial quantification of the deal's impact on forward revenue guidance. Technical levels to monitor for Gilat include the $8.50 resistance level, a two-year high last tested in 2024. For Boeing, key support resides at the $215 level, corresponding to its 200-day moving average. If initial airline adoption meets forecasts, secondary beneficiaries could include L-band satellite operator Globalstar and testing equipment maker Keysight Technologies. Should Boeing secure launch customer commitments from two major U.S. carriers by year-end, a re-rating of Gilat's valuation multiples is likely.
The agreement is a transformative contract that will materially increase Gilat's revenue base over the next three to five years. While exact figures are confidential, comparable deals in the aerospace sector for sole-source technology often contribute between 25% and 40% of a supplier's total annual revenue once full production commences. Investors should look for management commentary on the deal's contribution during the next quarterly earnings call for specific financial guidance. The revenue will be recognized over the life of the multi-year contract as hardware is delivered and software services are rendered.
Gilat's primary advantage lies in its phased-array antenna technology, which uses electronic beamforming instead of mechanical parts to track satellites. This results in a terminal that is lighter, more reliable, and capable of switching between multiple satellite constellations seamlessly. Current systems predominantly use mechanically steered antennas, which are heavier, slower, and more prone to maintenance issues. The lower power draw of Gilat's system is a critical factor for airlines focused on reducing fuel consumption, as every kilogram of weight and watt of power has a direct operating cost impact.
The market is currently led by Viasat, Intelsat, and Panasonic Avionics, which collectively hold an estimated 70% market share. Viasat provides services via its own satellite fleet, while Intelsat operates a hybrid model. A newer entrant is Starlink Aviation, which offers direct low-earth-orbit satellite service but requires significant aircraft modification. Gilat operates as a hardware and software provider to service operators like Boeing, rather than a direct service competitor. This wholesale model allows it to partner with multiple service providers without conflicting with their retail businesses.
The Boeing deal grants Gilat a crucial foothold in the high-value commercial aviation market, directly challenging established incumbents.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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