Wi-Fi in the sky likely to emerge the new cash cow for domestic airlines

The government’s move to allow Wi-Fi services on-board is set to boost airlines’ revenue kitty by a considerable amount.

Aviation secretary RN Choubey had said last week that a decision to allow Wi-Fi on-board was expected within the next 10 days.

Installing Wi-Fi equipment in an aircraft is a one-time cost that can be recouped in, as early as, a couple of months, depending on the demand and pricing, industry experts and airline officials told HT.

“The estimated cost of installing a Wi-Fi equipment, which depends on the service provider, quality, the bandwidth an airline is looking at and the fleet size, is ₹30-35 lakh. So, an airline like IndiGo may get a better deal compared to a smaller airline,” said an industry expert, who did not wish to be named.

“The operating cost would depend on the bandwidth and from where you get the internet services from, but this cost is negligible considering that you pay ₹500-1,000 for using internet for a month at home,” he added.

“Assuming that 50 passengers on a flight opt for Wi-Fi and an airline charges ₹300 an hour for the service, it will generate revenues of ₹15,000 per flight. An aircraft, on an average, does six flights a day, which makes it ₹90,000 per day. One can easily recoup the investment cost in just over a month,” another airline official said.

Around 60 airlines in the world offer Wi-Fi services, and foreign carriers charge $5-$8 per hour to access internet.

Indian carriers have already begun preparations.

“Air India is looking for Wi-Fi on-board and we had presentations from a couple of vendors sometime back. A feasibility study is also being conducted,” said the airline official quoted above.

“It is a progressive and proconsumer step to match pace with the changing demands of the air travellers,” said Phee Teik Yeoh, CEO, Vistara. “When the policy is out, we will get into the details to understand the processes involved and evaluate the opportunity.”

“This will be a good move. We want to offer the best services to our passengers,” Amit Agarwal, CEO, Jet Airways, had told HT last week.

“It takes around two days for the Wi-Fi wiring to be done. Airlines usually get this done when the aircraft goes for the regular maintenance checks so that there is no impact on the schedule,” another official said.

“Once the Wi-Fi system is installed, the supplementary type certification will be done by our team to ensure that no electro-magnetic interference is happening,” said an official of the Directorate General of Civil Aviation.