Talking about a revolution

Over the last few years the case for high-speed, seamless Wi-Fi in the sky has been made convincingly. In 2017, the London School of Economics published the first chapter of its Sky High Economics study. It calculated the true value of the connected passenger for the first time, forecasting that by 2035, airlines would receive an annual $30bn boost from broadband-enabled ancillary revenue, with a further $100bn available for the supporting industry ecosystem.

The second chapter, published in 2018, revealed that alongside the considerable commercial benefits outlined in chapter one, there were impressive operational efficiencies and cost savings to be made too. By examining the projected impact of connectivity across areas like fuel usage, route optimisation, predictive maintenance, supply chain processes, reductions in delays and air traffic management, the study predicted $15bn in annual savings for the aviation industry.

The transformative potential of aviation connectivity has been reinforced this year, with the publication of the LSE’s third and final chapter of Sky High Economics. The report has uncovered a pressing new commercial imperative to implement high-speed, high quality Wi-Fi – that of passenger behaviour and loyalty.

Speaking at APEX 2019 to launch the report, President of Inmarsat Aviation, Philip Balaam said that the authors had identified a global market of close to 450 million passengers who were both uncommitted to any airline loyalty programme and who would therefore be willing to switch whatever carrier allegiance they currently have in favour of those offering high quality inflight connectivity.

Balaam says: “Many of these ‘floating voters’ – and I use this term deliberately, floating voters are the ones that politicians care most about – are Generation Z and Millennial flyers, with different expectations of air travel, for whom the research suggests traditional rewards-based loyalty structures have far less appeal.”

It’s clearly a pivotal time for aviation and, in tandem, a time of tremendous opportunity. Over the next 20 years, IATA forecasts that passenger numbers will double to over eight billion. This not only means more aircraft, but also the rise of new technologies (including artificial intelligence and the better use of data), to satisfy the needs of these digitally demanding flyers.

Central to this is connectivity. It’s the great enabler which underpins increased customer satisfaction, reduced costs, operational efficiencies and access to a number of ancillary revenue streams. At APEX, Balaam highlighted that Accenture had forecast that aviation’s ongoing digital transformation will create over $300bn of incremental value by 2029 – and yet the adoption of connected technologies across the industry remains sluggish.

“Despite all the talk of new use cases and passenger service innovations at conferences like these,” he said, “with a few very notable exceptions, there’s not that much actually going on in practice. Wi-Fi is seen as just one more entertainment option to choose from, rather than what it could be – which is the enabler for a whole new cabin experience.”

He continued: “Put simply, the promise of the connected aircraft has yet to be fulfilled. Too much of the conversation is still in the future tense. It’s time to accelerate the pace of change.”