Data from a study carried out by Northern Sky Research (NSR) forecasts that the cumulative value of airline and passenger activity in the ‘In Flight Communications’ and entertainment field will have be worth a massive $36 billion by 2028.
Last year was not the best benchmark for growth as the industry suffered equipment and deployment delays as well as too few business models and pricing indecisions. ut the industry is now “bouncing back” says NSR.
“Overall, the market lost a bit of its shine as aeronautical connectivity grew in 2018 by $400 million – about 40 per cent less than expected – but on the bright side, passenger aircraft retail revenues reached more than $1 billion for the first time. NSR expects 2019 revenue growth to be the same with a faster pace of inflight connectivity hardware installs to catch up on backlog.”
Globally, all major airlines are signed up for some form of connectivity, and the remaining ‘greenfield’ opportunity now shifts to smaller airlines where passenger experience is not a major preoccupation, but connecting aircraft is seen as inevitable. “New and future customers have watched and learned from early adopter mainline carriers and understand better what they can get today from an IFC service onboard aircraft,” said Claude Rousseau, NSR Research Director and report author. “As a result, the expectations of cheaper and better IFC with higher capacity and more reliable service is a deeply-rooted impression amongst airline customers,” he continued.
“To amortise the still-high cost of IFC hardware and installation, the delivery of a quality service will become paramount for airlines who have growing needs across fleets for different types of connections for both cabin and crew. Over the next decade, NSR believes capacity pricing will decrease substantially and the associated savings passed to customers such that service providers will need to grow their value-added services to maintain margins,” says the study.