Could inflight connectivity bring greater ancillary revenues?

An AirXPerience panel at the 2017 Aviation Festival discussing ancillary revenues.
An AirXPerience panel at the 2017 Aviation Festival discussing ancillary revenues.

Better inflight connectivity could result in greater ancillary revenues for airlines, according to speakers at this week’s London’s Aviation Festival.

The three-day event saw delegates from airlines, suppliers and inflight connectivity companies debate the future of this valuable add-on to airlines’ businesses.

The argument is that broadband inflight connectivity (IFC), with its real-time pipe to the ground, enables more personalisation, better customer targeting and responsive advertising.

But will airlines make the most of the ancillary revenues opportunity, and if so, how?

According to “Boost” a new magazine produced by Inmarsat, only one in ten passengers currently makes an inflight duty free purchase – and the figure is falling year on year.

It suggests that “inflight shopping is seen as tired and dated” and argues that inflight connectivity could give ancillary revenues the shot in the arm they need.

Speaking at an “AirXPerience” session on the commercialisation of IFC, chaired by “Get Connected’s” Steve Nichols, Mario Franci, Inmarsat’s VP of Inflight Services said: “IFC enables airlines to be more creative with their ancillary revenue offerings. You can use passenger data to better target offers and you have your customer’s undivided attention, potentially for the whole flight.

“Retailers don’t get that kind of opportunity very often, but it will need radical new thinking to make the most of the opportunity.”

In a separate session, Lars Ringertz, Panasonic Avionics’ Director of Global Communications, said: “We are opening up our IFEC systems by way of application programming interfaces (APIs) and software development kits (SDKs) to make it easier for third parties to integrate with us.

“Many airlines may struggle to make a business case for IFC, but once you have it installed you start seeing the benefits.

“We have the IFEC platform, it just needs companies to be innovative to make sure their customers keep coming back.”

Eivind Roald, EVP Commercial, SAS, agreed and said that when it comes to whether or not airlines should adopt IFC, they were having the same arguments about inflight entertainment 20 years ago.

“In the future IFC will become a necessity,” he said.

An IFC connection with the ground also does away with the problem of credit card fraud on aircraft, by enabling real-time authorisation.

As Inmarsat’s “Boost” magazine says: “The internet has completely changed the way consumers shop on the ground and it has the potential to transform the way we shop in the air.”

“Retail Week” recently calculated that the potential extra inflight spending based on terrestrial online shopping habits could be as much as $2.47bn.

Like this feature? Subscribe to our free e-newsletter and get lots more


You May Also Like