Inmarsat (ISAT) has reached a landmark agreement with Middle East megacarrier Qatar Airways, but the market’s response is subdued as the shares are only up 1% to 853.7p.

The mobile satellite communications firm will let Qatar use its advanced new GX Aviation in-flight broadband solution so passengers can browse the internet and stream videos in-flight.

Inmarsat hit the headlines on 1 June as media speculation on a takeover of company by SoftBank excited the market and prompted a rally in the shares.

FLOOD OF CONTRACTS

Over the last year, Inmarsat has scored four other contracts for its GX Aviation arm alone, including agreements with Lufthansa’s Eurowings, Air Zealand and Austrian Airlines.

Today's underwhelming reaction probably reflects the strong run the share price has already enjoyed.

GX Aviation will be used on more than 130 aircraft - a considerable amount in the context of Qatar's total passenger aircraft of 174.

Inmarsat is straight out of the traps as the GX Aviation technology has already been equipped on Qatar’s latest Airbus 350s, while installations for the remaining aircraft will start later this year.

In a recent broker note, RBC Capital Markets analyst Wilton Fry argues that the company’s increased launch investment and new satellites yet to deliver in-service revenues will drive the share price performance. The European ground-to-air network is also anticipated to come into service this year, further helping Inmarsat’s performance.

Inmarsat

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Issue Date: 02 Jun 2017