Digital investment will propel airlines beyond the pandemic

12 November 2020

Rupert Pearce, CEO, Inmarsat

  • corporate

  • global-xpress

Six months into the pandemic, as the global impact on businesses, governments and markets continues to unfold, it’s clear that few industries have been harder hit than aviation. Almost overnight, an international border shutdown and personal health concerns thrust the airline industry into crisis mode.

Uncertain climates breed hesitation, indecision and investment slowdowns. And so, it may seem a surprising time for the world’s leading satellite company to be making its next investment into the digitisation of the aviation industry. The latest venture in London-based Inmarsat’s ambitious technology roadmap – GX+ North America – will boost capabilities across the pond, where onboard Wi-Fi to date has been notoriously patchy and inconsistent, even though it has been available for more than a decade.

Inmarsat’s confidence to continue investing in aviation is founded on a belief that the industry is set for a strong bounce back, with digital innovation at its core.

And the company isn’t alone in its predictions. A recent survey of industry professionals conducted in April – in the depths of lockdown restrictions for most countries – revealed that more than two thirds (69%) do not expect COVID-19 to have a long-term impact on passenger experience investment[1]. There was a consensus that digital technologies, including real time data analytics, biometrics and artificial intelligence, will be the biggest drivers of recovery and future profitable growth for airlines.

Connected inflight experiences are expected to become even more important in the near future, as airlines compete to enhance the onboard experience and regain passenger confidence, offering a way to establish more stringent health and safety standards for touchpoints of concern.

A recent survey by global airline trade association IATA[2] found that sitting next to someone carrying the virus, and using the toilet inflight, are among passengers’ biggest concerns about flying during the pandemic. Inflight connectivity can enable digital boarding, seating and toilet queueing systems to reduce such concerns and support safe social distancing in the cabin. The removal of seatback menus in place of in-app catering services is another way to minimise touchpoints while retaining a high quality passenger experience. Few airlines have yet to utilise onboard Wi-Fi in this way, yet the capability exists today, ready to be unlocked.

Alongside the immediate need to regain passenger confidence, there are early signs that airlines will need to adapt to changing behaviour patterns, as their passengers return. In the last week of August, data traffic over the Inmarsat European Aviation Network inflight Wi-Fi system rose to a record high. The London School of Economics (LSE) believes that this shift is reflective of new habits forged in lockdown – with users up to three times more likely to connect, and stay connected, to onboard Wi-Fi than before the pandemic to enhance their inflight experience.

But why has lockdown got people spending even more time online? The crisis has undoubtedly accelerated digital transformation, opening passengers’ eyes to the new ways they can grow their businesses, stay connected, keep informed – and of course, entertained. As a result, the world has vaulted forward five years in digital adoption, in just eight weeks.[3]

This in turn raises the question of whether adoption of high quality, secure, global in-flight broadband to meet passenger demand will also drive the digitalisation of the cockpit and aircraft systems to accelerate the era of the smart aircraft. Recent third party studies have suggested that such a move could dramatically improve airline operating efficiency, capturing $15 billion of operating cost savings per annum for the industry. This would usher in a new era of enhanced safety and congestion-relieving air traffic management services, as well as support a step-change reduction in the industry’s carbon footprint. These are powerful incentives for airlines to digitalise on the back of global satellite broadband connectivity.

Aviation has traditionally been slow in adopting change due to expensive regulatory and equipment hurdles. But adopting digital technologies that are now readily available can change this.  In order to weather this storm, and whatever challenges lie ahead, as well as seize new emerging opportunities, airlines need to be more receptive to change and innovation. It’s time to adopt the same blue-sky thinking that originally inspired the Wright Brothers’ first flight.

This crisis has left aviation as well as other industries with an unexpected opportunity to reimagine their world. The business model of the future will undoubtedly have a much larger digital dimension.

With a seismic shift already underway, can airlines afford to hold off on making stabilising investments now? On the contrary, rather than hunkering down, airlines that take this moment to invest in their capabilities – improving passenger experience, delivering efficiencies and driving productivity – will reap the benefits during the recovery period and beyond.

[1] https://www.inmarsataviation.com/en/news/digital-transformation-key-to-profitable-aviation-recovery-says-.html
[2] https://www.iata.org/en/publications/store/covid-passenger-survey/
[3] McKinsey, The COVID-19 recovery will be digital: A plan for the first 90 days


About the author

rupert bioRupert Pearce joined Inmarsat in January 2005 as Group General Counsel and, from January 2009, additionally held the position of Senior Vice President, Inmarsat Enterprises. He became Chief Executive Officer in January 2012. Previously, Rupert worked for Atlas Venture, where he was a partner working with the firm’s European and US investment teams. He was previously also a partner at the international law firm Linklaters, where he spent 13 years specialising in corporate finance, M&A and private equity transactions. Rupert received an MA (First Class) in Modern History from Oxford University and won the 1995 Fullbright Fellowship in US securities law, studying at the Georgetown Law Center. He has been a visiting fellow of the Imperial College Business School, London, lecturing on the school’s Entrepreneurship programme, and is the co-author of Raising Venture Capital (Wiley).