Displaying items by tag: Sky High Economics
In-flight broadband to create $5.2bn market in Middle East by 2035
In-flight broadband has the potential to unlock a $5.2 billion market within the Middle East region by 2035, finds new data released from the 'Sky High Economics: Quantifying the commercial opportunities of passenger connectivity for the global airline industry' report.
Carried out by the London School of Economics and Political Science (LSE) in association with global mobile satellite communications provider Inmarsat, the study forecasts that airlines in the region will take a $1.3 billion share of the boost in ancillary revenues.
Based on current IATA data and industry sources, Sky High Economics shows that airlines around the world will benefit from four new revenue streams, including broadband access charges - providing connectivity to passengers in-flight.
Airlines will also benefit from e-commerce and destination shopping - making purchases on-board aircraft with expanded product ranges and real-time offers; advertising - pay-per-click, impressions, sponsorship deals with advertisers; and premium content - providing live content, on demand video and bundled W-IFEC access.
The research argues that as passenger numbers grow globally, so too will passenger expectations for access to high-quality in-flight connectivity. The data shows that when it comes to passenger value brought about by new Wi-Fi enabled ancillary revenue streams, airlines will benefit from an extra $3.21 per passenger. At present, airlines around the world average an additional $17 per passenger from 'traditional' ancillary services like duty free purchases and in-flight retail, food and drink sales.
Also, despite the gradual blurring that has occurred in the airline type selected by many business passengers, the Middle East region continues to represent one of the higher revenue opportunities for both domestic and international FSCs (Full Service Carriers) - in 2035, the split is LCC (Low Cost Carriers) at $239m vs. FSC at $511m. The research confirms the very strong position many global FSCs have that are based there.
“The airline industry is rapidly evolving across the world, including the Middle East,” said Dr. Alexander Grous (B. Ec, MBA, M.Com, MA, PhD.), Department of Media and Communications, LSE and author of Sky High Economics. “This research shows that airlines have a clear strategic opportunity to become distinctly more retail-focused and reap the benefits of this.”
Ben Griffin, Vice President, Middle East, Africa and South Asia at Inmarsat Aviation, said the latest advancements in satellite technology have “unlocked exciting new opportunities for airlines to enhance their passenger experience, increase their operational efficiencies and grow important new revenue streams.”
Griffin added, “Having the right capabilities in place - from the cabin to the cockpit - is the key to benefitting from everything that a connected aircraft can offer, today and in the future. As the Sky High Economics report has identified, airlines in the Middle East are extremely well positioned to take a lead with the game-changing new trend.”
Inmarsat said it aims to transform the global aviation industry by bringing complete connectivity to every aircraft and flight path in the world. It is the first and only provider with a complete next-generation High-Throughput Satellite (HTS) network spanning the world. Inmarsat also claims to be the only aviation broadband provider capable of connecting the complete aircraft from cabin to cockpit.
Inmarsat's passenger solutions are complemented by its certified safety and operations services. GX Aviation is the world's first global, high-speed in-flight broadband service from a single operator. It allows airline passengers to browse the internet, stream videos, check social media and more during flights, with an on-board connectivity experience on par with mobile broadband services available on the ground.