Insight | Passengers’ digital lifestyles drive a wave of innovative connectivity in APAC aviation
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Across this diverse territory, GX Aviation inflight connectivity has been installed on a wide range of different sized aircraft, from Airbus A320s to Boeing 777s, and the Airbus A380 superjumbo. Inmarsat customers include AirAsia, Singapore Airlines and Air New Zealand.
Most recently, Inmarsat partnered with Mahata Aero Teknologi, Lufthansa Systems and Lufthansa Technik to roll out its award-winning connectivity service on 50 Citilink Airbus A320s. A similar arrangement will see Citilink’s parent company, Indonesia’s flag carrier Garuda, provide inflight broadband to its passengers.
But before we round up all of the news across the region, Inmarsat’s Vice President Aviation APAC, Ben Griffin, gives his overview of the market.
The key development at present is the increasing inbound and outbound travel into the region. This is in line with the growth of a sizeable middle class who are keen to travel. According to Mastercard Global Destination Cities Index (GDCI) 2017, Asia Pacific destinations made up half of the world’s top 10 most visited cities. Furthermore, the region also had the highest visitor spending among its top 10 cities. The international visitor spend in the region indicates the region’s strong growing popularity.
The biggest driver of demand for aviation is the APAC region. IATA data suggests that APAC will be the source of more than half of the new passengers over the next two decades, with China forecast to displace the US as the world’s largest aviation market. Indeed, last year (2017), APAC saw both the highest number of overall passengers and the largest year-over-year jump in traffic.
Digital has also become an essential part of everyday life for many in Asia-Pacific. According to the Digital in 2018 report by We Are Social and Hootsuite, Asia-Pacific is now home to over two billon internet users, equating to a penetration rate of 48%. This presents a huge opportunity for inflight connectivity in the region.
Today, airlines cannot build brand loyalty without having access to passenger data. This rich data helps airlines understand their passengers and their needs. Additionally, improvements in data and analytics are also expected to help airlines predict and adapt to changes in supply and demand in real-time.
In the next 20 years, it’s predicted that there will be 32,000 new aircraft put into service to meet this exploding growth in passengers.
In Asia alone, the total number of aircraft is expected to nearly triple (from around 6,000 aircraft today to nearly 17,000 aircraft in 2035). Satcom will be needed for communications, navigation and surveillance for many of these aircraft.
A 2017 study by Helios and Inmarsat identified that satellite communications, such as Classic Aero, have saved airlines $3bn over the past 15 years and those savings are expected to increase dramatically with SwiftBroadband-Safety. A natural evolution of Classic Aero services, it offers a step change in capabilities for operations and safety.
A study carried out by London School of Economics and Political Science (LSE), in association with Inmarsat, found that inflight broadband will be a $130bn market by 2035 and airlines will generate an additional $30bn in incremental revenue. The research also identified that inflight broadband has the potential to unlock a $52bn market within Asia Pacific by 2035.
Connectivity is considered by many to be predominantly a long-haul priority. From the passenger Wi-Fi standpoint, this is due to extended journey times and the better potential returns on investment this would seem to bring. More hours in the air means more time online, in other words. Now, however, short-haul operators are seeing the many benefits that seamless broadband provides for them too.
LCC capacity within Asia-Pacific has more than quadrupled over the past decade. LCCs will generate approximately 570 million seats within Asia-Pacific in 2018, compared to fewer than 130 million in 2008, according to CAPA and OAG data. The LCC penetration rate within Asia Pacific is now close to 30%, compared to less than 14% in 2008.
This demand for connectivity in short-haul could be driven by the fact that, in many ways, short-haul is like a daily commute, where checking your phone on the way to work is commonplace.
So while long-haul passengers are more organised travellers – they’ll plan to watch several films on the IFE system, for example – it could be argued that short-haul’s commuting mind-set means that those passengers will expect to be able to continue their online life while flying, just as they would on a bus or a train.
With every short-haul airline competing on price, connectivity offers airlines a point of difference.
IFC doesn’t just allow passengers to work or check their social feeds in flight – it can also provide a number of data opportunities for airlines, and become a platform for innovation. As airlines gather richer passenger data through IFC, they can better personalise their service and offerings.
There is no ‘one size fits all’ model when it comes to pricing or partnerships.
Given the breadth of models currently operating, the coming months and years will reveal whether an industry-wide cost structure emerges, making it easier for passengers to compare like-for-like.
Asian low-cost carrier Citilink, a subsidiary of Garuda, for instance, believes a free model is best for driving passenger loyalty and satisfaction. Citilink’s move is the latest evidence that it’s both possible and economically viable for LCCs to match premium flag carriers when it comes to free inflight connectivity.
Demand for inflight Wi-Fi is driving airline loyalty and customer satisfaction among passengers in Asia-Pacific. The desire to get online is particularly strong in this region, where according to our latest Inflight Connectivity Passenger Survey, three quarters of travellers (72%) who had access to inflight Wi-Fi in the past year chose to use it – the highest of any region globally.
Based on the 2018 survey, inflight Wi-Fi is now considered the second most important factor for passengers in Asia-Pacific when choosing an airline, behind only brand reputation.
Alongside this, 70% of passengers in APAC would be likely to recommend inflight Wi-Fi having tried it previously and 78% of passengers would be more likely to rebook with an airline if high quality inflight Wi-Fi were available.
In short, there is clear, strong demand across APAC to get online while in the sky.
Inmarsat is pioneering an exciting step-change in global connectivity that will transform capabilities within the aviation industry, both in the cockpit and in the cabin. GX Aviation, for example, is the world’s first inflight broadband solution with seamless, reliable high-speed global coverage provided through a single operator. This allows passengers to seamlessly browse the internet, stream videos, check social media and more during flights, just like they do on the ground.
Inmarsat is the world’s only provider of satellite connectivity to the whole aircraft, including inflight connectivity for passengers, and the world’s most advanced operational safety in the cockpit.
Unlike other solutions, GX Aviation is a bespoke build that meets the needs of airlines and their passengers today – the result of Inmarsat’s unmatched experience as a connectivity service provider to more than 200 airlines worldwide.
GX is also future-proofed. As demand grows so will our capacity. From the upcoming launch of a fifth Global Xpress satellite to an ongoing commitment to improve the performance of antennas and onboard equipment, Inmarsat guarantees a continuous improvement in network performance, bandwidth economics and the services and applications that will set our customers apart from the competition.
A vision of what was to come this year actually arrived at the tail end of 2017. When Singapore Airlines’ trailblazing A380 (the first of five new upgraded A380s from Airbus) touched down at Changi Airport it was hailed as a pivotal moment in the carrier’s ongoing attempts at raising customer satisfaction.
Noted aviation blogger Alex Macheras was certainly impressed. He described the plane’s use of Inmarsat’s high-speed GX Aviation inflight broadband service, provided to the airline through Inmarsat partner, SITAONAIR, as the best connecting he had ever experienced.
He said: “The performance on my phone was exactly how it is on the ground — I even joked on board to the SITAONAIR representative that the connection was more reliable than it had been on the ground in Toulouse!”
He added, enthusiastically: “It was less plane Wi-Fi and more real Wi-Fi.”
Katrina Korzenowski, VP, Asia-Pacific at SITAONAIR added: “The new high-speed passenger broadband solution from SITAONAIR is the perfect complement to the new suite of cabin products that SIA is introducing, taking passenger comfort and connectivity to new heights.”
Connectivity was already being seen as central to raising the quality of customer experience.
A year on, and SITAONAIR’s VP of customer programs, Yann Cabaret, says the partnership with Singapore Airlines is stronger than ever.
“Over the past year, our partnership with SIA has seen some exciting developments,” he said. “With the help of our ground-breaking inflight technology, SIA passengers are now experiencing truly next-level connectivity once aboard their plane. Here at SITAONAIR, we believe that embracing a digital shift will help to reinvent air travel – making it safer, more efficient and, of course, more enjoyable for passengers. We are committed to powering innovation with recognised expertise and future-proof solutions.”
"It was less plane Wi-Fi and more real Wi-Fi!"
"They have self-digitalised their lives"
AirAsia’s CEO Tony Fernandes has long spoken of building a digital airline when outlining his plans for the region’s leading low-cost carrier. In 2018, the airline took another step closer to bringing Fernandes’ dream to fruition.
Earlier this year, GX Aviation was certified and awaits installation on the Airbus A320 and A330 fleet across the AirAsia Group, including its long-haul sister airline, AirAsia X.
GX will power AirAsia’s inflight entertainment and connectivity platform (IFEC), ROKKI. Lalitha Sivanaser, ROKKI’s CEO, said that AirAsia’s passengers were hungry for high-speed connectivity. Noting that the airline currently received in excess of 300 calls every month from passengers enquiring whether their upcoming flight had Wi-Fi, she said this was to be expected because passengers have adopted the convenience of staying connected.
“They have self-digitalised their lives,” she explained. “Whether it’s staying updated on social media, banking or getting assignments done, everything is done online now. Passengers constantly need that connectivity.”
Sivanaser also agreed with the predictions of Fernandes when it came to airlines using data to better serve their passengers.
“Airlines… can understand their requirements and their trends,” she said. “They will be able to serve passengers in a more personalised and meaningful manner.”
The Indonesian low cost carrier – named Asia’s Best LCC at the TripAdvisor Travellers Choice Awards – has forged an innovative partnership with Inmarsat, Mahata Aero Teknologi (MAT), Lufthansa Systems and Lufthansa Technik to provide a free inflight Wi-Fi service for passengers.
Citilink’s President and CEO, Juliandra Nurtjahjo, recognised that being digitally oriented meant offering a “world-class inflight Wi-Fi service.” This was achieved by signing a fleet-wide contract for Inmarsat’s GX Aviation on its Airbus A320s.
And rather than the dominant pay-to-play model, Citilink explained that it saw free access as a crucial point of attraction and difference. Costs, it said, could be recouped by its ambitious plans for ancillary revenue.
Citilink’s bold vision was cemented in September by the news that GMF AeroAsia, part of the Garuda Indonesia Group, would support the installation of GX Aviation on board Citilink’s A320s.
In similar fashion to its LCC subsidiary, Citilink, Garuda has entered into a strategic partnership with Inmarsat, Mahata Aero Teknologi (MAT), Lufthansa Systems and Lufthansa Technik, to provide its passengers with inflight broadband.
Next-generation Wi-Fi coverage will be powered by GX Aviation, and the service is due to launch in 2019.
Says Ben Griffin: “Inmarsat has been working very successfully with Mahata, Lufthansa Technik and Lufthansa Systems on the roll out of GX Aviation inflight broadband with Citilink. The fact that Garuda Indonesia has also selected the service for its domestic and international fleet is further testament to this partnership and our market-leading service capabilities.”
The country’s national carrier has won high praise for its inflight Wi-Fi service, powered by GX Aviation. A collaboration with Panasonic (the Japanese electronics corporation provides Air New Zealand’s inflight entertainment systems), this unique partnership was celebrated at the 2018 APEX Expo in Boston, where it won Best Inflight Connectivity at the APEX Awards.
In this sense, Air New Zealand is a role model for Inmarsat’s recently inked landmark strategic collaboration with Panasonic. The deal will create a best-in-class IFC solution for the next generation of connected aircraft, for the benefit of manufacturers, airlines and their passengers worldwide.
"Our passengers are increasingly demanding ‘at home’ internet capability during flights"
The end of the 2018 brought more activity in APAC. Aircalin, located in the French territory of New Caledonia, announced that it had chosen Inmarsat’s next-generation IFC solution, GX Aviation, to power its partner SITAOnAir’s InternetONAIR portal.
The carrier’s CEO Didier Tappero explained the thinking behind the deal. “Our passengers are increasingly demanding ‘at home’ internet capability during flights, so that they can carry on with their digital lives without interruption. And SITAONAIR’s GX Aviation-enabled InternetONAIR will provide Aircalin passengers with remarkable connectivity.”
