in Aerospace

Inflight broadband creating potential £3.7bn market in Middle East by 2035

Posted 23 January 2018 · Add Comment

Inflight broadband has the potential to unlock a £3.7 billion ($5.2bn) market within the Middle East region by 2035, according to new data released today from the ‘Sky High Economics: Quantifying the commercial opportunities of passenger connectivity for the global airline industry’ report.



Carried out by the London School of Economics and Political Science (LSE) in association with Inmarsat, the study forecasts that airlines in the region will take a $1.3 billion share of the boost in ancillary revenues.

Based on current IATA data and industry sources, 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 W-IFEC access

Using the independent forecasting model, specially developed for the research, the quantified revenue opportunities for the airlines in the region are as follows:

Above: Predicted airline profit of broadband enabled ancillary revenue opportunity in the Middle East.

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.

Also, despite the gradual blurring that has occurred in the airline type selected by many business passengers, the Middle East region continues to represent one of the higher revenue opportunities for both domestic and international FSCs (Full Service Carriers) – in 2035, the split is LCC (Low Cost Carriers) at $239m vs FSC at $511m. The research confirms the very strong position many global FSCs have that are based there.

Dr Alexander Grous (B. Ec, MBA, M.Com, MA, PhD.), Department of Media and Communications, LSE and author of Sky High Economics, said: “The airline industry is rapidly evolving across the world, including the Middle East. This research shows that airlines have a clear strategic opportunity to become distinctly more retail-focused and reap the benefits of this.”

Ben Griffin, Vice President, Middle East, Africa and South Asia at Inmarsat Aviation, commented: “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.”

Inmarsat is transforming the global aviation industry by bringing complete connectivity to every aircraft and flight path in the world. It is the first and only provider with a complete next-generation High-Throughput Satellite (HTS) network spanning the world and the only aviation broadband provider capable of connecting the complete aircraft from cabin to cockpit.
 

* required field

Post a comment

Other Stories
Advertisement
Latest News

QinetiQ brings autonomy expertise to European research programme

QinetiQ is to play a pivotal role in OCEAN2020, the first research programme awarded by the European Defence Agency as part of its European Defence Fund initiative.

Lincad wins Leonardo power management contract

Lincad, the British manufacturer of bespoke batteries, chargers and power management systems for military applications, is pleased to announce that it has won a further contract with Leonardo to supply batteries and other power

MAEL and Icelandair expand maintenance partnership

Monarch Aircraft Engineering (MAEL) has won an expanded maintenance commitment from Icelandair.

Oxford Airport hosts hullo launch

Following the successful introduction of the hullo Aircrew brand at EBACE last year, the technology start-up has officially launched its industry-first software platform at London Oxford Airport, which is designed to connect

Babcock to develop Busan base

Further strengthening its international reach and its presence in South Korea, Babcock International has announced that it is to open a facility in Busan, South Korea’s second largest city after its capital Seoul.

Innalabs secures €2.6m ESA contract.

InnaLabs has announced a €2.6m contract with ESA to design, develop, manufacture and test a highly reliable radiation hardened 3-axis gyroscope, used for measuring angular velocity or maintaining orientation of satellites.

Aviation Africa SK18418
See us at
FIL18 BT111017220718S&P BT281117080318Aviation Africa BT18418SMI FAVSABT2411120418SMI HelicopterTBT1402240518SMI FAVWSBT1402060618