Europe's airlines race for WiFi in battle for passengers


  • TECH
  • Tuesday, 17 Feb 2015

WIFI FOCUS: KLM is among the airlines that offer onboard WiFi as a value-add.

Europe's airlines are racing to add WiFi to their planes, eager to attract Internet-hungry customers in a cut-throat short-haul market and potentially add millions of dollars of revenue through entertainment, services and advertising.

US airline passengers already have a chance of accessing WiFi on 66% of miles flown, against a worldwide average of 24%, according to data from Routehappy, which rates flights worldwide on amenities such as seats and entertainment.

In Europe, adoption of a ground-to-air service such as that in the United States, is harder due to the number of countries in the region, while satellite-based services have been too costly for short flights.

But with more satellites being sent up, bringing costs down, and airlines more aware of the money-making possibilities, price is no longer such a stumbling block, industry watchers say.

Lufthansa, Air France-KLM, Ryanair and Vueling are some of the major European carriers looking at on-board WiFi on short-haul flights, following low-cost carrier Norwegian, which offers it for free on 74 of its 76 Boeing 737s.

As well as potentially charging passengers to stream TV shows and music on their mobile devices during flights of a couple of hours or less, airlines can use onboard connectivity to offer restaurant bookings, shopping or hotel offers in conjunction with advertisers and partners.

"Nowhere else in the world do you get that captive audience where you know everything about the people that got on the plane and what kind of advertisements you should offer them," said Robin Cole, vice-president of global business development at Global Eagle Entertainment, which provides satellite-based WiFi for airlines Norwegian and Southwest.

Global Eagle is due to trial a fee-paying system on two Air France A320s this summer in conjunction with mobile firm Orange, and believes the retail and sponsorship opportunities of onboard Wi-Fi could boost industry revenues by hundreds of millions of dollars a year.

Becoming a basic need

The revenue opportunities are attracting attention across the European industry, with low-cost carriers particularly quick to move, said AT Kearney consultant Rene Steinhaus. "There's a huge logic to having WiFi on board, even in Europe," he said.

Ryanair will use advertising or other revenue streams to ensure WiFi access doesn't add to its costs, chief executive officer Michael O'Leary said, adding it had begun talks with mobile phone companies over charges, and with technical companies over fitting the lightest possible aerials for the lowest cost.

In the United States, moves by low-cost carriers such as JetBlue to offer basic onboard WiFi services for free were putting pressure on mainline carriers, Routehappy data research manager Jason Rabinowitz said.

Britain's Inmarsat, which partners with Honeywell to offer Internet onboard using its satellites and the US company's hardware, currently has over a 9% share of the commercial cabin connectivity market.

"It's growing faster than anything else in the space that I can think of. Almost every airline in the world is asking about it right now," Jeff Sare, Inmarsat's vice president for Airline Market Development, told Reuters.

Another company that stands to gain is Panasonic-owned AeroMobile, which provides mobile coverage within the aircraft via satellite for a fee that appears on a customer's usual mobile bill. Marketing and revenue development director Jack Gordon said it expected to announce a deal with a major European short-haul carrier this year.

Lufthansa Systems, whose BoardConnect platform provides in-flight entertainment and connectivity on shorter flights, expects airlines will have to offer Internet onboard within the next two to four years.

"Costs for data transfer are falling rapidly and customers are putting pressure on airlines," said Norbert Mueller, head of BoardConnect. "Wireless internet has become something of a basic need." — Reuters

 

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Tech News

European countries reach digital services tax deal with U.S
Ford's fleet customers send mixed signals on electric vehicles -exec
Lucid CEO says it will take decade to deploy robotaxis on road
U.S. consumer watchdog orders tech giants turn over information on payment systems
Trump's new social media deal sends SPAC's shares soaring
Facebook's oversight board seeks more transparency on high-profile users
Velodyne Lidar founder plans to nominate directors next year -letter
Meta4 launches NFT fund with Andreessen Horowitz backing
Facebook signs copyright agreement with some French publishers
UK should legislate to prevent scam ads online - FCA, lawmakers

Others Also Read


Vouchers