Making money out of thin air may have been laughed at, not any more. Inflight broadband has the potential to unlock a $5.2 billion market within the Middle East region by 2035, according to a study titled “Sky High Economics: Quantifying the commercial opportunities of passenger connectivity for the global airline industry” by the London School of Economics and Political Science (LSE) in association with Inmarsat, the world’s leading provider of global mobile satellite communications. The study forecasts that airlines in the region will take a $1.3 billion share of the boost in ancillary revenues.
Sky High Economics shows that airlines around the world will benefit from four new revenue streams: Broadband access charges – providing connectivity to passengers inflight, e-commerce and destination shopping – making purchases on-board aircraft with expanded product ranges and real-time offers, advertising – pay-per-click, impressions, sponsorship deals with advertisers, premium content – providing live content, on demand video and bundled access.
The research argues that as passenger numbers grow globally, so too will passenger expectations for access to high-quality inflight connectivity. The data shows that when it comes to passenger value brought about by new, Wi-Fi enabled ancillary revenue streams, airlines will benefit from an extra $3.21 per passenger. At present, airlines around the world average an additional $17 per passenger from ‘traditional’ ancillary services like duty free purchases and inflight retail, food and drink sales.
Ben Griffin, vice president, Middle East, Africa and South Asia at Inmarsat Aviation, added, “The latest advancements in satellite technology have unlocked exciting new opportunities for airlines to enhance their passenger experience, increase their operational efficiencies and grow important new revenue streams. Having the right capabilities in place – from the cabin to the cockpit – is the key to benefitting from everything that a connected aircraft can offer, today and in the future. As the Sky High Economics report has identified, airlines in the Middle East are extremely well positioned to take a lead with the game-changing new trend.”
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