British Airways will be the launch customer for Inmarsat’s in-flight passenger broadband service.
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It will now expand its offering to include domestic and short-haul European flights.
Talks between the two firms are at an advanced stage, Inmarsat said as it unveiled its plan, which will be the first of its kind in Europe.
“We will work hard with BA to position it in the vanguard of the coming revolution in aviation passenger connectivity in Europe,” said Inmarsat CEO Rupert Pearce.
Pearce said the existing SwiftBroadband service had been very well received by passengers using the transatlantic service, which is operated by Airbus A318 aircraft and includes a stopover in Ireland to clear US customs, which means it arrives in New York as a domestic flight.
“We are really happy to build on that early relationship with BA,” he added.
BA's head of product and service, Kate Thornton, confirmed the talks and said: “British Airways is in discussions with Inmarsat about leading Europe in a new era of broadband in the air.
“Starting with UK domestic routes, Inmarsat intends to deploy Europe’s first ground-based 4G broadband network, giving our customers the internet access they expect on the ground while in the air.”
Inmarsat's Pearce said billing services would be handled through one of two models, depending on airline preference, allowing either the airline or service provider to own the customer relationship.
More on in-flight connectivity
Inmarsat’s new service will be delivered across an integrated satellite - air-to-ground network over 30MHz of S-band, with a new satellite named Europasat to be built by Thales Alenia Space and scheduled for launch in 2016. Inmarsat will share the space hardware costs with Hellas-Sat.
The new network will also integrate with Inmarsat’s existing Global Xpress aviation service, so long-haul flights entering and leaving Europe would, in theory, be able to offer seamless connectivity.
Pearce said Inmarsat had decided to roll out a European network following the success of a similar project in North America, run by a company called Gogo, which has already triggered telco AT&T's construction of a competing network.
He said the average annual revenue per aircraft could be approaching $100,000.
Universities and science minister David Willetts said: “Today’s announcement is an important investment in new infrastructure that will promote productivity and growth in the UK and across Europe.
“I welcome the fact that this service has been enabled by the EU’s approach to harmonising the necessary spectrum across EU member states. This approach enables companies to build business cases that can deliver pan-European benefits.”