Wednesday, March 20, 2013
In-Flight Connectivity Driven by Passenger Demand, Habits
Executives from several of the largest in-flight connectivity service providers talked on Wednesday about the growth and changes in the industry in recent years during a panel at the SATELLITE 2013 Conference in Washington D.C.
Passenger demand is the primary driver in terms of the level of service provided by airlines. The market is further moved by whether the airline wants to offer the service to passengers themselves or have an agreement where the service provider controls the distribution and pricing of the service.
The panel also discussed passenger expectations when it comes to cabin connectivity. The growth in popularity and bandwidth usage on personal electronic devices (PED) is changing the service required for aircraft, and service providers are adapting to that increase.
Bill Sullivan, director of business development at ViaSat, said the popularity of smartphones is influencing long-term investment decisions for airlines.
“We don’t know what the devices are going to be two to three years from now,” said Sullivan. “There’s just going to be an ever increasing demand for bandwidth, and an ever increasing expectation by the passengers, and an ever increasing pressure on airlines to deliver that kind of bandwidth, so that’s why we’re in the business of trying to generate more and more bandwidth.”
When asked whether JetBlue would be providing ViaSat’s high capacity satellite in-flight connectivity solution to passengers for free, Sullivan tempered expectations. JetBlue launches the service later this year, and passengers can expect to have a high speed connection for basic internet activity such as web browsing, email and social media, but they would likely have to pay a fee for more complex operations such as file sharing and streaming video, which he said the industry currently sees as a premium service onboard aircraft.
According to the panelists, the relationship between in-flight connectivity service providers and airlines, will continue to evolve over the next decade.
“Things have changed really fast in the last three years,” said David Bruner, vice president of global communications at Panasonic Avionics. “The amount of data consumed per user, has doubled to 100 megabytes per session.”
Bruner and Ian Dawkins, CEO of OnAir, agreed every airline varies in terms of how they want to deploy the service and on what aircraft. It’s become a “competitive weapon,” Bruner said. Airlines are changing the in-flight connectivity business models, by varying whether the service provider operates the service for the life of the aircraft or the airline itself wants to control pricing and distribute different levels of service at different prices.
For example, Emirates offers OnAir wi-fi service for a fee, but passengers can also use data roaming using GPRS/EDGE network on select A380 flights. In contrast Delta Air Lines offers passengers the option to purchase a “wi-fi pass,” that can be used to access its Gogo in-flight internet service, whereas previously passengers were able to access Gogo independently of the airline they were using.
Bruner said the number of airlines promising to offer “complimentary” in-flight internet is “radically changing” the industry as well.
“It is a different business,” said Bruner. “It is a lower margin, higher volume business for those of us on the operations side of it, and we’re going to have to adjust. We’re going to have to provide more capacity. I have aircraft today where a single customer wants to be guaranteed 20 megabytes per airplane. That’s unheard of, that’s ridiculous, that’s crazy, but that’s happening, and so that just changes the mindset for all of us in terms of what we thought this business was.”
Related: In-Flight Connectivity News