Special Report
Free or not to be free?
That is the question airlines are asking as they roll out full cabin WiFi in a 24/7 connected world.
September 1st 2014
Increasing numbers of Asia-Pacific airlines are signing up for the latest in Wi-Fi systems, giving passengers unprecedented inflight communications and entertainment access via their tablets and smartphones. Read More »
 |
| Nok Air chief executive, Patee Sarasin offers free Wi-Fi to increase the airline’s appeal to young passengers who insist on connectivity |
From Kuala Lumpur to Beijing, Tokyo to Bangkok, Manila to Taipei and Singapore, full service and budget operators alike are investing in systems that deliver information to airline passengers at a speed and with a variety only previously available on the ground.
Who will pay for it remains a question of serious debate. Passengers want it, but they don’t want to pay for it. Airlines are having trouble working out a pricing formulae for it. Some airlines subsidise the service, but see this as a short term measure to encourage passenger use, with fees being introduced at a later date.
Some suppliers have subsidized the service to interest airlines in signing up. This again is not a long term solution. At the recent SITA Air Transport Summit in Brussels, the director general and CEO of the International Air Transport Association (IATA), Tony Tyler, said Wi-Fi should be free at airports but did not agree it should be free in the air because of the cost.
Providing the infrastructure for Wi-Fi on the ground is completely different cost-wise. Installing Wi-Fi in the cabin is more complicated technically.
Nevertheless some airlines, including carriers in the Asia-Pacific, are offering free Wi-Fi onboard. Patee Sarasin, chief executive of Thailand’s Nok Air, a domestic budget carrier that is expanding onto regional routes, has added Wi-Fi to its existing complimentary services since August to increase its appeal to younger passengers that insist on connectivity. Nok Air partnered with Thaicom, Thailand’s leading satellite operator, and has become the first carrier in the region to use Ku-band to introduce connectivity services onboard.
SilkAir, Singapore Airlines’ regional full service carrier, is incorporating free Wi-Fi into their service offerings. At SilkAir passengers can access IFE on any PED or smart phone for free. on flights of more than two hours, tablets are provided for premium cabin passengers.
It is expected to be big business for suppliers. At this year’s Singapore Air Show, U.S.-based Honeywell Aerospace and Gogo, which supply inflight connectivity systems to airlines, announced a collaboration with satellite giant, Inmarsat, that will introduce the “first global high-speed broadband for the skies”, dubbed the Global Xpress (GX) Aviation network.
President of Honeywell Aerospace Asia Pacific, Briand Greer, forecast Wi-Fi could generate $2.8 billion for his company in the next two decades. He estimates up to 8% of airlines offer wireless connection, but that this number will grow to 25% by 2018.
The GX network can download at up 50 megabits per second, Greer said.
Inmarsat launched the first of three satellites that will serve the GX network last December. China flag carrier, Air China, will be the first airline to test it on its A330 fleet in the second quarter of 2015.
Recent surveys by Airbus and Honeywell found passengers increasingly expect airlines to have inflight wireless services. An Airbus report about the comfort demands of Asian passengers, conducted by global consultancy, Future Laboratory, released earlier this year said Asia-Pacific business travelers expect Wi-Fi enabled cabins with telephone and conference calling facilities. Honeywell’s own survey of 3,000 U.S., U.K. and Singapore passengers revealed almost 90% of flyers would give up an amenity, such as drinks or a better seat, for a faster and more consistent wireless connection.
Among the deals announced this year is Philippine Airlines (PAL), which is the launch customer, on its new international routes, for OnAir Play, OnAir’s latest Wireless-IFE product. Providing fully integrated connectivity and inflight entertainment, passengers can stream or download the on-demand content they choose to their personal electronic devices (PEDs).
“We are expanding our long-haul network rapidly, with plans to open routes to Australia, the U.S. and beyond,” said PAL president Ramon Ang. PAL has opted to carry iPads that are being made available to passengers. Passengers will require their own tablet, smart phone, personal computer, or rent an iPad during the flight. PAL has not announced if it will charge for some Internet access.
 |
| 'Wi-Fi will soon become a differentiating commodity and airlines are likely to offer some level of free connectivity onboard with other premium premises offering revenue opportunities' |
| Ian Dawkins Chief executive of SITA’s OnAir |
Last month, AirAsia activated its on-board Wi-Fi testing for Instant Messaging, emails and content streaming that will be introduced progressively on all AirAsia Group aircraft. AirASia Group chief executive, Tony Fernandes, said Wi-Fi equipment that was available was too expensive so the carrier decided to develop its own.
“It has taken us five years to come to this stage. It will be the first on-board Wi-Fi product in the world at an affordable price. Finally, the masses will be able to enjoy Wi-Fi on board at a low-cost price,” he said.
In July, Japan Airlines (JAL) announced it would be the first Japanese airline to introduce an in-flight internet service (JAL SKY Wi-Fi) on domestic routes that will be installed on 77 domestic aircraft, including JAL’s B777s, B767s and B737s by 2016.
This month Taiwan’s China Airlines will take delivery of its first new B777-300 equipped with a new inflight entertainment system from Panasonic. It includes a social networking feature called “Seat Chat”, which allows friends on the same flight to message one another.
Singapore Airlines subsidiary, SilkAir, has launched its wireless inflight entertainment system, SilkAir Studio. Passengers can stream blockbuster hits, short features and music to their PEDs.
The launch came after a successful trial conducted on one of its aircraft, beginning last December. Feedback from customers was generally very positive, with stable technical performance and operating efficiency recorded. Chief executive Leslie Thng, said the service gives passengers an innovative new way to enjoy entertainment content in the air, using personal devices of their choice. Singapore Airlines, at the forefront of the trend, introduced a US$50 million inflight connectivity program two years ago, and will complete the equipping of its fleet with the technology next year.
At the SITA IT summit, Tyler said it was high-time airports gave passengers free, easy to access, Wi-Fi at all terminals around the world. But when asked if he believed airlines should offer free Wi-Fi on board to passengers, his answer was a definite “No”. The reason for this, say airline executives, is that providing the infrastructure to offer Wi-Fi on the ground is a completely different kettle of fish from providing it in the air. It involves expensive satellite launches.
Ian Dawkins, chief executive at OnAir, a SITA subsidiary, says Wi-Fi will soon become a differentiating commodity, and that airlines are likely to start offering some level of connectivity onboard free-of-charge, with other premium services providing the revenue opportunities.
OnAir thinks airlines should be funding the hardware and then looking to use their Wi-Fi product more widely to get better value from it. Marketing director, François Rodriguez, said funding needed to be tailored to each airline’s strategy. “It is important to recognize that airlines derive significant operational benefits by having an aircraft connected, so clearly that needs to be taken into account.” However, looking further ahead, he said the proliferation of connected aircraft, with airlines using connectivity to make operational savings, “could well lead to more airlines offering Wi-Fi free of charge in the future”.
Studies clearly indicate that many passengers will be prepared to dig into their wallets to get access. Another recent study by Skyscanner of Singaporean travellers researchers found 42% of travellers would pay for inflight internet. Among 1,000 Indian travellers 72% are willing to pay for Wi-Fi services inflight. The Honeywell study showed a vast majority of travellers are inclined to use in-flight Wi-Fi.
It revealed the availability of Wi-Fi influenced the flight selection process for 66% of those surveyed. Some 22% of respondents said they have paid more for a flight that was Wi-Fi enabled versus one that was not and 17% had switched from their “preferred” airline to another carrier if the odds of travelling on a Wi-Fi enabled flight were higher. The survey indicated that nearly half of those polled would be “willing to experience a travel-related inconvenience” for Wi-Fi that matched the speed and reliability of their home internet.
Whatever it costs and whoever ends up paying for it, inflight Wi-Fi connectivity is becoming a “must have” that is here to stay.
