Inflight Wi-Fi is trending in ME
The airline industry is on the cusp of a connectivity revolution.Currently, only a quarter of planes offer onboard Wi-Fi, often of variable quality with patchy coverage, slow speeds and low data limits.
Until now, the aircraft cabin has not kept pace with change on the ground, where seamless high-speed connectivity is now an expectation. Although some relish the time to disconnect from the outside world, there’s growing demand for Wi-Fi in the sky – our recent study of 9,000 airline passengers, in partnership with GfK, found that 60 per cent of passengers now see inflight Wi-Fi as a necessity rather than a luxury.
Luckily, change is afoot. With the advent of high speed inflight Wi-Fi services such as GX Aviation, we expect high quality inflight connectivity to be ubiquitous on airlines across the world by 2035. This will revolutionise how passengers experience flying, in turn opening up a wealth of previously untapped revenue opportunities for airlines. According to Sky High Economics, a recent report produced in association with the London School of Economics, this emerging market will be worth $5.2 billion in the Middle East region alone by 2035.
Today, airlines earn an average $17 per passenger from ‘traditional’ ancillaries such as duty free purchases and inflight refreshments. As more airlines adopt onboard connectivity solutions, there is a huge opportunity for revenue growth through commercialising passenger experience. Middle Eastern carriers could earn an extra $3.21 per passenger through new broadband-enabled revenue opportunities, amounting to a $1.3 billion increase in revenues for airlines in the region by 2035.
The availability of quality inflight Wi-Fi will transform how time is spent and experienced during flight. Passengers’ time in the air will be more valuable to airlines than ever before, and there are four main ways in which this is expected to convert into added revenue. Internet access charges will become the main source of broadband-enabled revenue in the Middle East, worth $724 million by 2035, and there will be a new range of inflight advertising opportunities - including adverts on free broadband packages and sponsorship deals - which will generate an extra $261 million.
Upgraded shopping and premium content services will improve inflight experience while growing airlines’ broadband-enabled revenues. Whether it’s ordering duty free shopping which is delivered straight to your hotel, booking a recommended restaurant for dinner or arranging a taxi to meet you at the gate, e-commerce and destination shopping platforms will make air travel more convenient and more dynamic. This will come at no small gain to airlines, which stand to make $289 million in the Middle East through e-commerce opportunities. New possibilities for premium content, such as live sports coverage and on-demand video streaming, will generate airlines $52 million, and give customers the ability to access the same content in the sky that they love watching on the ground.
Exploring what this means on a global level puts into perspective the scale of the opportunity. Overall, the inflight connectivity market is predicted to be worth $130 billion by 2035, with connected ancillary revenue for airlines accounting for $30 billion of that. That’s more than IATA projected for the profitability of the entire global airline industry in 2017.
Growing demand for inflight Wi-Fi globally makes the opportunity harder to ignore - 44 per cent of passengers say they would stop using their preferred airline within the next year if it did not offer high quality connectivity. Passengers want access to the same high-speed internet they are used to at home, and airlines that recognise this demand with investment in quality services will be more likely to retain customer loyalty now and in the future.
As an industry we have reached a key moment where technology has caught up with customer demand. It’s now possible to give passengers a ‘living room quality’ WiFi experience on the plane. By doing so, airlines will make tangible revenue gains, future-proof their offering and transform passenger experience for the better. It’s an opportunity not to be missed.
Internet access charges will become the main source of broadband-enabled revenue in ME, worth $724 million by 2035, and there will be a new range of inflight advertising opportunities which will generate an extra $261 million
(The views expressed are solely of the author. The publication may or may not subscribe to the same.)