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 U.S. airline passengers already have a chance of accessing Wi-Fi on
66 percent of miles flown, against a worldwide average of 24
percent, 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 Wi-Fi 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 Global Business Development at Global Eagle
Entertainment, which provides satellite-based Wi-Fi 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 Wi-Fi on board, even in Europe," he said.
Ryanair will use advertising or other revenue streams to ensure
Wi-Fi access doesn't add to its costs, CEO 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.
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In the United States, moves by low-cost carriers such as JetBlue to
offer basic onboard Wi-Fi 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 U.S. company's hardware,
currently has over a 9 percent 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."
(Additional reporting by Peter Maushagen in Frankfurt; Editing by
Mark Potter)
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