Wi-Fi on airplanes will be slow to fly financially, expert warns

29 Oct 2013

While the benefits are obvious for passengers, the true economic value for airlines deploying Wi-Fi has yet to be determined and airlines will be challenged to spark extra revenue, an expert claims.

Jon Click, director of PricewaterhouseCoopers (PwC) US, told Siliconrepublic.com that while there is a lot of initial demand for Wi-Fi among business travellers, for example, airlines are challenged when passengers actually get on board.

“Conversion rates often fall far short of what the expectations would have you believe,” Click said.

Around the world, airlines have been adding in-flight mobile services and recently Aer Lingus added Wi-Fi and mobile services to transatlantic routes.

But like all commercial activities, the detail is in the retail and Click says there may be something of an “enthusiasm gap” between what passengers say they’d like to do and what they actually do.

“The airlines’ largest competitor for selling Wi-Fi and other ancillary services is actually sleep,” says Click.

The latest PwC Experience radar shows that 70pc of business flyers demand Wi-Fi access for longer flights.

Leisure flyers, too, are prepared to spend 40pc of their flight times using Wi-Fi.

The ability to access Wi-Fi and content on personal devices rather than seat backs is also a major trend in developed economies, where tablet ownership is highest.

To compete effectively, PwC encourages airlines to invest more on innovative digital connectivity and customised offerings based on usage levels and device preferences.

Flyers prefer to opt for bundles at the ticketing stage that don’t require them to pay multiple fees and would pay for connectivity alongside baggage and food and beverage options in advance of the flight.

“The opportunity is there, it’s just not as large as you would think. People prefer to have connectivity bundles in one purchase price and the opportunity is there that if done correctly airlines can package products in a way consumers would find acceptable,” Click said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years