The future passenger experience
This week Inmarsat heads to APEX 2017, where the aviation industry’s leading experts, airlines, buyers and suppliers gather to discuss passenger experience opportunities. Inmarsat will showcase the latest news and insights around the aviation connectivity revolution, with a mix of lively debate and exclusive research on offer. Want to know how ground-breaking IFC is transforming paxex? Then head to stand #553 and speak to Inmarsat’s experts.
Better tech, faster speeds
Of course, some airlines already have in-flight broadband – and penetration is greatest in the US. But the offerings vary enormously by carrier and, the quality is often less than stellar. In-flight WiFi can be slow, patchy and expensive. This is down to the technology which is currently used – and is often not up to the job of maintaining dozens of connections on a plane travelling at 560mph.
However this is changing and fast. The next few years are going to see in-flight broadband appear where it doesn’t exist and get much better where it does.
That there is public appetite for this is not in doubt. People are used to being able to access services like Facebook, Netflix and Amazon wherever they are. According to a recent Inmarsat survey of 9000 fliers, 83% of passengers would choose an airline that offered in-flight Wi-Fi over a similar carrier that didn’t. What’s more, as the president of Inmarsat Aviation, Leo Mondale notes, “more than half of passengers would prefer connectivity to an in-flight meal.”
Both airlines and aeroplane manufactures are moving in this direction. On its website, Airbus now talks about the growing demand for on-board entertainment and other services and how its new platform “delivers the full breadth of new connectivity services and is a generation beyond any other available system.” Similarly, some carriers – such as Lufthansa – already have some in-flight offerings and their websites talk about use of personal devices on board.
If better technology is one half of this equation, the rise of the smartphone is other. The first iPhone appeared in 2007 and now, nine years later, smartphones are ubiquitous. A 2016 Pew Research study showed that US has 72% smartphone penetration, while the UK has 68% and Germany 60%; South Korea is the champion with an astonishing 89%.
Smartphones have been a genuinely disruptive technology and have made mobile internet a mass market phenomenon. They have ushered in the age of the selfie and, via apps like Facebook and Instagram, given rise to the idea of people documenting their own lives. They have also been the single biggest driver behind ordinary consumers expecting internet access everywhere. As any number of commentators have pointed out, these devices are not phones any more. Rather, they are personal computers in our pockets that happen to make calls.
Thus, there are a number of factors that point to there being real demand for better broadband in the air. But it’s not just about what passengers want. There are also considerable upsides for airlines.
The first benefit is obvious. If you offer people quality in-flight broadband, you can charge for it. In an industry where there has been decades of downward pressure on ticket prices, this offers a new revenue stream and an opportunity to build per passenger-mile revenue, especially with low-margin economy fliers. Alternatively, when offered as a free service, it could be the difference between a potential passenger choosing airline A over airline B. The hotel business is a good example to consider here. When Wi-Fi was first offered as an option in hotels, it was usually as an additional – often fairly expensive – charge to the guest. Today, more and more hotels offer free Wi-Fi, with those that don’t looking increasingly uncompetitive.
A captive market
Next, long-haul travel can be cramped and boring. Offering people more to do on board – whether it’s social media or live sport – is likely to translate into greater customer satisfaction and thus, greater loyalty. It is also notable that, according to research conducted by GFK for Inmarsat, the customers who are most likely to appreciate connectivity are high value groups such as business fliers and regular fliers. The ability to continue working on board is a huge incentive for them to choose a particular airline over another.
There’s the possibility of other, ancillary revenue streams too. There’ll be greater opportunities for in-flight shopping. Improved broadband could mean everything from a better range of goods, to real-time card transactions, to stronger affiliate programmes with third parties. There’s advertising that can be highly targeted because an airline knows its passengers and knows who is in which class. And, there’s sponsorship: watch this ad and get ten minutes’ online for free.
There’s also live sport, for which there is already a strong and proven demand (and which airlines like Lufthansa already offer); other possibilities in this vein include hugely increased choice of video on demand and new deals between airlines and content distributors.
In the longer run, the possibilities are the same as those as those offered by the meeting of super-fast home broadband and other technologies. Using VR headsets, passengers will be able to spend flights in fully immersive multi-player games. Or they could chat to friends or relatives, but sitting side by side in a virtual space that looks like, say, a mountain cafe in Switzerland. They could have their driverless car pick them up from the airport and take them home where an automated grocery or meal delivery, booked mid-flight, is timed to coincide with their arrival.
There may also be significant cost savings from BYOD (bring your own device). If all passengers have at least one small screen with them, is there any need to put screens in the seats? Many budget airlines already do without seatback screens, and the financial rationale for removing screens is compelling. Airline regulations mean that the average seat-back screen costs $10,000 – and can add around six kilos in weight per seat which lowers fuel economy. The tech world moves so quickly, too, that seatback sets look and feel dated long before they are due for an upgrade.
For business users, the case is equally strong. Flying time is still viewed by many as a dead time. But with high-speed, reliable broadband, it will be possible for passengers to participate in meetings and even use videoconferencing while they’re in the air. They’ll be able to work in the Cloud as the do on the ground and, as services improve, work with others in virtual spaces. As with leisure passengers, greater connectivity promises to be a win for both the carriers and the passengers they carry.
In some ways this just means airlines are catching up with the rest of the world. In the last ten years, mobile broadband via Wi-Fi hotspots and 4G has changed the way we live and work. Nowadays, in the developed world, there are few places that you cannot receive email, stream music and even watch services like Netflix. But air travel is the final frontier for widespread, fast broadband. It’s even become the talk of late night chat shows, with comedian Louis CK describing it as “the newest thing I know that exists.”