Here's why airlines are ditching those seatback video screens

US airlines are split on whether single-aisle fleets need them, but all agree that better WiFi means more revenue.

By Businessweek , October 10 2019
Here's why airlines are ditching those seatback video screens

In the quest to command higher fares and traveler loyalty, airlines are constantly scrambling to market their onboard services as better than Brand X. These days, one highly visible battleground is directly in front of you: the seatback screen.

While such displays are firmly entrenched aboard long-range fleets, helping pass the hours during ocean crossings, there’s a deep difference of opinion among U.S. carriers when it comes to domestic single-aisle jets.

The advent of onboard Wi-Fi has given airlines the option of using your phone or tablet as a portal for films, television shows and video games, avoiding the expense of costly hardware at every seat.

Three of the largest U.S. airlines – American Airlines, United Airlines and Alaska Airlines - are removing screens from their medium-range Boeing 737 and Airbus A320 domestic workhorses. Southwest Airlines has never equipped its Boeing 737s with screens and said it has no plans to change course.

Meanwhile, Delta Air Lines and JetBlue are betting seatback screens with audio-video on demand will lure domestic travelers. A three-year-old Delta subsidiary, Delta Flight Products, has merged the two worlds, developing a wireless streaming product and seat-mounted tablet screens for many of the airline’s new deliveries, dispensing with the weight associated with traditional, hardwired displays.

The split is evident internationally as well: Screens on single-aisle fleets are rare in Europe, but still relatively common in Asia among the full-service carriers.

The reason for replacing the seatback screen is, of course, the ubiquitous smartphone. Onboard streaming services are seen by some airlines as an obvious way to trim expenditures. But for others, that sinking feeling passengers get when they realize there’s no screen in front of them presents a marketing opportunity.

The obsolecence factor

Airlines that are jettisoning their screens say it’s not just about high install costs. Those screens add weight, increasing fuel costs.

What’s more, the technology in a seatback screen typically becomes obsolete much faster than the gadget in your pocket. Kurt Stache, American Airlines’ senior vice president of marketing and loyalty, said that maintaining the screens isn’t cheap, either: “That’s clearly a pain point after a couple of years.” (Delta’s new pop-out screen tablets, meanwhile, can easily be replaced.)

More than 50% of American’s passengers bring two devices with them, Stache said. As a result, power outlets and larger overhead bins – not screens – are the items that rank highest when American polls passengers on their priorities. (The airline is also outfitting most of its single-aisle fleet with faster satellite-based Internet access.)

For those airlines sticking with seatback screens, it’s not just about satisfying passengers who still expect one. JetBlue is also offering broadband WiFi for free while Delta is working to offer that amenity as early as next year.

So why have both? The airlines argue that passengers want to replicate their “two-screen” home experience of simultaneously watching television or a movie while browsing the web.

“Just because you are in a tube in the air, it doesn’t mean you need to stop your life as it is on the ground,” said Mariya Stoyanova, JetBlue’s director of product development. “We give back control to you similar to what you have in your living room.”

Longer flights will still have screens

American and United have retained seatback screens on some of their domestic flights. Lucrative routes flown by some single-aisle aircraft between New York and Los Angeles or San Francisco will keep them. United has also kept screens on more than 200 Boeing 737s from the former Continental which are equipped with live DirecTV service.

Indeed, despite its commitment to streaming, United is considering new seatback screens in some Boeing 737 Max 10 aircraft, which start to arrive next year. Screens would be on the Max 10 that fly on four trans-continental destinations.

Tarek Abdel-Halim, United’s managing director of in-flight entertainment and connectivity, declined to confirm if the largest Max variant will come with screens at each seat, or which option he feels is superior. “We don’t say that one offering is necessarily better than another,” he said.

Delta Chief Executive Officer Ed Bastian said that “entertainment is important” because passengers spend an average of three hours on a flight. There are “absolutely” opportunities to monetize seat-back screens, Bastian said, but “I’m not interested in monetization for monetization’s sake.”

Notwithstanding the industry debate over seatback versus streaming, all airlines are keen for faster WiFi service to help provide more personalized service – and to accumulate passenger data. This means not just knowing your preferred drinks, but also what kind of entertainment strikes your fancy and which ads should be funneled your way.

“You have a captive audience at 35,000 feet,” JetBlue’s Stoyanova notes. “There’s a lot you can do."

With more connectivity will come more passenger shopping, more potential advertisers, more subscription offers and more partnerships like the kind Amazon inked with JetBlue and Apple has with American. Julie Lichty, head of digital services and solutions at Panasonic Avionics Corp., said more carriers “are finding advertisers to pay for engagements.” Ads pay for onboard WiFi sessions or other entertainment options used by passengers.

Shopping for shoes at 40,000 feet

Shopping for shoes or groceries at 40,000 feet “will become perfectly normal,” said Mike Pigott, senior vice president of aviation connectivity at Global Eagle Entertainment Inc. “It’ll be treated the same way as shopping on any mobile environment.”

And there are more frequent flyer points to be had, too. As part of its partnership, JetBlue offers extra loyalty program rewards for those who shop on during their flight. American’s deal with Apple allows Apple Music to be streamed onboard.

But before you get too excited, passengers should know that all of this in-flight distraction isn’t designed to be a free lunch. The ability to market to thousands of captive passengers is seen as a lucrative source of new revenue.

Stache of American Airlines said the carrier doesn’t want to start charging for everything right away, but instead sees a slower approach to boosting onboard revenue from its digital portal. “If you go too far too quickly, you may have people saying ‘I don’t want to engage with this,’” he said.

KLM - Flying Blue

05 Feb 2019

Total posts 38

I like the DELTA innovative solution that can please all passengers

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