Each airline passenger will be worth an extra A$5 (US$4) per flight to carriers once they’re able to offer uninterrupted broadband services, according to a study commissioned by satellite communications provider Inmarsat.
Inflight connectivity should generate US$30 billion for airlines by 2035 out of an overall market of US$130 billion including technology providers and related companies, the report compiled by the London School of Economics says.
Revenue will flow from four main sources: access charges, online shopping, advertising and premium content such as on-demand video.
While only 53 operators worldwide currently offer in-flight internet, such access has already become an “expectation” rather than a luxury, according to Inmarsat Chief Executive Officer Rupert Pearce.
The service will become ubiquitous over the next two decades, with Asia-Pacific airlines benefiting most, followed by Europe and North America, the study published Tuesday says.
“We will see innovative deals struck, partnerships formed and business models fundamentally changed,” Alexander Grous of the LSE’s media and communications faculty, the report’s author, said in a statement, adding that the switch is something airlines “need to be planning for right now.”
The coming of in-flight broadband will open up a new stream of non-ticket or ancillary revenue for the industry, adding to the US$17 per passenger per flight that many airlines already squeeze out of charges for items such as checked baggage, priority boarding, food and drink and duty-free sales.