“And does my flight have Wi-Fi…?”
Why AirAsia’s cabin digitalisation is being driven by its connectivity-hungry passengers
To paraphrase a famous proverb, every journey begins with a single step. Or, in the case of AirAsia’s adoption of Inmarsat’s broadband service – GX Aviation – the journey began with a conversation. The Group CEO of Asia’s foremost low-cost airline, Tony Fernandes, and the CEO of Inmarsat, Rupert Pearce, held a brief but productive 30-minute meeting in London in the summer of 2016. They discussed how to bring Fernandes’ long-held vision of building a digital airline to life.
Two years later and the charismatic Fernandes’ dream is close to reality. GX Aviation is currently being certified and will be installed on the Airbus A320 and A330 fleet across the AirAsia Group, including its long-haul sister airline, AirAsia X. The commercial launch is expected as soon as the second half of 2018.
GX will power AirAsia’s inflight entertainment and connectivity platform (IFEC), ROKKI. And as Fernandes noted upon signing the landmark deal with Inmarsat last year, it means that the airline’s passengers will “be able to stay connected in ways that matter to them, whether it’s streaming movies or music, checking social media, messaging friends or catching up with work emails.”
Alongside Fernandes’ ambitious digital plans – which includes inflight mobile payments, individually tailored baggage fee pricing and using hackathons to explore new tech-based ideas – the additional impetus behind AirAsia’s decision was a simple one: customer demand. Lalitha Sivanaser, ROKKI’s CEO, says that AirAsia’s passengers require high-speed connectivity while flying. A sentiment that chimes with the findings of Inmarsat’s Inflight Connectivity Surveys, which in 2017 found that 61% of respondents consider Wi-Fi more important than inflight entertainment and that most consider it a necessity, rather than a luxury; in 2018 67% said they would be more likely to rebook an airline if inflight Wi-Fi were available and 70% would be likely to recommend it having used it.
Passengers have adopted the convenience of staying connected. They have self-digitalised their lives
“They can’t stomach anything slow or unreliable,” Sivanaser explains. “It’s only natural because passengers have adopted the convenience of staying connected. They have self-digitalised their lives. Whether it’s staying updated on social media, banking or getting assignments done, everything is done online now. Passengers constantly need that connectivity.”
To that end, Sivanaser notes that AirAsia receives close to 300 calls a month from passengers enquiring whether their upcoming flight has Wi-Fi capabilities. And this number is increasing.
It’s not only passengers that are interested in aviation’s connectivity revolution. Since 2017’s announcement of the partnership with Inmarsat, a raft of businesses have been in contact with AirAsia to offer relevant revenue-generating services that are powered by connectivity.
And this is where we get to the essence of broadband in the skies across APAC. Everyone’s a winner. Passengers benefit from a Wi-Fi service indistinguishable from that on the ground, and the airlines can unlock the commercial potential of inflight connectivity.
Indeed, in a November 2017 media briefing, Tony Fernandes described data as “the new oil” with AirAsia well-placed to use that data to improve its passenger experience.
“Uber is worth 10 times what we are, but actually our data is richer,” he said. “You begin to see how innovative these companies are, be it Uber, Grab or Amazon. They really change the way you do things. And I thought, why can’t we bring that digital experience into airlines? And that began this journey.”
Sivanaser adds: “Airlines will be able to understand their passengers better. They can understand their requirements and their trends. They will be able to serve passengers in a more personalised and meaningful manner.”
Previously, she notes, a passenger was someone that sat on, say, Row 23, Seat 23H. The advent of the digital airline completely transforms this scenario.
Now we know the preferences of the person who sits on 23H
“Now we know the preferences of the person who sits on 23h,” she points out. “We know he likes to eat spaghetti and have a hot drink. We know that he will also purchase some alcohol or chocolates. This means we can personalise his offer.”
With access to richer data, AirAsia no longer has to wait for that passenger to approach a flight attendant. They can approach him with the right offer.
“It empowers our passengers,” Sivanaser says. “They’re not confined to what is only available in the cabin space. The world is their oyster.”
Now with AirAsia’s vision – Tony Fernandes’ vision – of digitalising the airline we can take ancillary revenues beyond those traditional mediums
This has clear implications for ancillary revenue, says Sivanaser.
“For some time, airlines have been depending on baggage, food and seat selection on the low-cost carriers to bring in some ancillary revenue,” she says. “Everything that isn’t a seat to a destination is ancillary for us. Therefore ancillary revenue is very, very important to us. It’s one of the key drivers for the airline. And now with Tony’s vision of digitalising the airline, we can take ancillary revenues beyond those traditional mediums. Advertising, partnerships, things that touch the online space.”
Because many of AirAsia’s routes across APAC are short-haul, the ability to address passenger needs in a speedier and more meaningful manner is key. The robust and dependable nature of GX Aviation means such concerns are a thing of the past.
And this is where those new, digitally enabled, third-party business services can also play their part. Sivanaser says that AirAsia is evaluating relationships with a host of companies working in the onward travel, entertainment, ticketing and e-commerce area.
“We’ll be able to explore new revenue streams and therefore increase revenue in a different space,” she explains. “It means we won’t be fighting in the same space we’ve always been in.”
To achieve this impressive and rapid rate of transformation, AirAsia and Inmarsat have worked very closely. A partnership was already in place thanks to AirAsia utilising Inmarsat’s SwiftBroadband solution. Sivanaser explains that Inmarsat’s excellent track record in providing network and commercial reliability meant trading up to its next generation service, GX Aviation, was a natural progression.
This close working relationship has also meant that any challenges faced have been overcome with the minimum of fuss. As AirAsia flies through and from many countries, for example, telecommunications rights of satellites for GX Aviation had to be obtained.
“Inmarsat has been excellent in sorting it out,” she confides. “In particular when providing us with regular updates. I’m happy to say that most of licensing issues are now sorted and we’re ready to go.”
Once you’re connected you don’t want to get disconnected
So with the commercial launch imminent, what does this next generation of connectivity mean for airlines across APAC? Last year’s Sky High Economics study, carried out by the London School of Economics, forecast that the APAC region would be the foremost beneficiary of the growth in broadband-enabled ancillary services by 2035, to the tune of $10.3bn.
As Sivanaser reiterates, it’s all about staying connected. “I’ll give you an example,” she says. “My mum, who is 78, wasn’t connected until two months ago when I finally bought her an iPhone. Now she can’t live without it. Once you’re connected, you don’t want to get disconnected.”
This is at the heart of AirAsia’s bold digital vision. Alongside other innovative offerings fuelled by technology, such as using a facial recognition system to replace traditional boarding passes and inking a deal with Uber to offer a seamless door-to-door experience for travellers, a connected aircraft is paramount.
“AirAsia is in the business of making Asia and the world smaller, and the digitalisation of the cabin with Inmarsat and GX Aviation will get us there,” confirms Sivanaser.
And it all comes back to that crucial 30-minute meeting in the summer of 2016 between the two companies’ forward-thinking CEOs.
“That little meeting to explore how we could realise AirAsia’s dream of going beyond a traditional airline – and transforming into a digital airline – resulted in a massive undertaking to see how we could achieve this,” concludes Sivanaser.
“Finally, we’re here.”