The crazy economics of in-flight Wi-Fi

Forget champagne, fully flat beds and on-board showers.WOLE SHADARE writes that for airlines’ travellers, the must-have facility these days is WiFi

Changing times
At over 37, 000 feet above sea level, air passengers can make video calls, send Short Messaging System(SMS) and be in contact with their loved ones and continue with their works as if they are in their homes or offices.
That is the power of technology, which was a rarity many years ago, as airlines are taking advantage of technology to offer great services to their passengers especially for long haul passenger.
Travelling long distances across different time zones can become a big torture, tiring and sickening. So, many passengers pay with their credit cards to surf the Internet and be in touch while they are in the air.

Most gulf carriers like Emirates, Qatar, Etihad, United States airlines and others are daily developing Internet technology. For Emirates, the airline offers 20 free MB to its economy passengers, which they expect passengers to exhaust within two hours when they log in. They are allowed to pay between $9 and $24 for few hours and duration of the flight.

On an American or Delta plane you could wind up paying $10 to $20 to surf for the duration of your flight. JetBlue offers complementary Internet access to all of its passengers. For most major airlines, Internet is a revenue generator.

Passengers’ power
An airline expert told New Telegraph that passengers go for airlines that provide such facilities especially if the journey is more than six hours or one that lasts for between 10 and 16 hours. It keeps them busy and helps them to run down the time of sitting in a position for so long. Long distance journeys can be very boring even with inflight entertainment facilities.
It would be recalled that from humble beginnings, inflight connectivity has certainly taken off in recent years. With more than 80 airlines worldwide now offering wifi services to passengers, nearly half of all the miles being travelled by air each year have the option of inflight wifi.

From real-time access to news and weather, to being able to browse the web, stay in touch with family, or catch up on email, the benefits to passengers of on-board Internet are clear. So much so that today, 94 per cent of air travellers believe inflight Internet enhances their travel experience and 30 percent check if wifi is available before booking.

For the airlines, however, it’s not as simple as just offering connectivity any more. Back on the ground, the world of public wifi has rapidly evolved and become increasingly commoditized, so businesses have looked to both monetize and differentiate their offering from the competition.
Customers can increasingly walk into their favourite café or hotel and access the wifi network using a branded application, where they will also see promotions and marketing for additional products or services. Not only are customers avoiding the frustrating login screens and confusion around choosing a network, they’re getting a more personalized experience and incentives to spend more money as a result.

Making a wifi strategy more passenger-centric is also becoming increasingly important from a business model perspective.
The CEO of Delta Air Lines recently announced aspirations to make on-board Internet free to passengers across the Delta fleet, a move that could set off a domino effect across the industry.
This highlight that now is the time for airlines to put in place a differentiated wifi service that not only delivers for the customer, but can provide a revenue stream in the future.

By tightly integrating wifi within the airline’s apps and entertainment systems, it becomes a means to offer passengers additional, paid-for services – from inflight food and personalized entertainment, to last-minute deals at their destination or even loyalty credit cards.

Win-win for airlines
It’s clear that the inflight connectivity landscape is evolving – it’s no longer just about making sure it is available on board most flights, but also about making the customer experience great too. For airlines, keeping customers within a more tightly controlled airline-branded ecosystem is an obvious way to differentiate from the competition and serve up additional, complementary services.

This has the double benefit of a better passenger experience and a better way to monetize each seat – two things that are going to be increasingly important in a future where free wifi might not just be available in the hotel and café at the airport, but on the flight home as well.

Though frequent fliers have made their pleas to the airlines to offer on-board Internet, when the service is available it isn’t always up to par with the tech-savvy traveller’s needs…

Even though an increasing amount of airlines like Finnair, Srilankan Airlines, Kuwait Airways, TAAG Angola Airlines, and WestJet have announced that they’ll soon be implementing WiFi, there’s still a long way to go when it comes to the quality of the service, as exorbitant pricing and slow speeds that would make even a snail yawn are deterring fliers from considering purchasing Internet aboard.

Crazy pursuit
Airlines that offer inflight WiFi and/or GSM Internet access are Aer Lingus, Aeroflot, AirAsia, Air Canada, Air China, Air Europa, Air France, Air Tran, Alaska Airlines, Alitalia, All Nippon Airways, American Airlines and ANA. Others are British Airways, Cebu Pacific Air, China Eastern Airlines, Delta Air Lines, Egypt Air, Emirates, Etihad, EVA Air, Finnair, Geruda Indonesia, United, Turkish Airlines.

Also included are GOL Linhas Aereas, Inteligente, Gulf Air, Hong Kong Airlines, Iberia, Iceland Air, JAL, Jetblue, Lufthansa, Libyan Airlines, Malindoair, Mango Airlines, Nok Air, Norwegian, Oman Air and Philipine Airlines. Qatar Airways, Ryannair, SAS, SaudiArabian Airlines, Singapore Airlines, SouthWest Airlines, TAM, Tap Portugal, US Airways, West Jet, Vietnam Airlines and Vueling also made the list.

The London School of Economics has made a strong business case for the future of Inflight Connectivity (IFC), predicting a market worth $130 billion by 2035, and contribution of $30 billion to airline revenue.

By world region, the largest market will be in Asia Pacific, reaching $10.3 billion in revenue by 2035, with Europe and Russia in second place at $8.2 billion and North America, which took the lead in the initial introduction of IFC inflight as a common service, in third place at $7.6 billion by 2035.

Last line
Consumers expect in-flight Wi-Fi to offer the same browsing experience in the air, as they have at home or at their favorite hotel. Like in the hospitality industry, airlines see the connectivity experience as a differentiator that customers care about and that can help increase ancillary revenues from added services and purchases.

Wole Shadare