Say goodbye to wifi-less flights.
By 2035, high-quality in-flight wifi will likely be ubiquitous, projects a new report released by the London School of Economics and Political Science in collaboration with British satellite telecom company Inmarsat. It will also be a lucrative one, with the potential to generate a $130 billion global market and rake in $30 billion in ancillary revenue for airlines around the world.
Currently, only 25% of flights offer some form of wifi, reports the study. As a result, 2018 forecasts show airlines receiving only $1 billion in revenue related to broadband, compared to the $60 billion generated by “traditional” sources, such as seat upgrades, onboard duty-free purchases, and baggage fees.
This will rapidly change, however, with the introduction of a new generation of satellites that will address current broadband quality challenges, such as low data limits and patchy connectivity, as well as with increasing adoption from airlines driven by customer demand.
The report examined four main sources of broadband-enabled ancillary revenue: access charges, e-commerce and destination shopping, advertising, and premium content (eg: streaming video). Access charges would only account for half of the projected revenue growth for airlines.
Widespread in-flight wifi would also generate $100 billion more in revenue for non-airlines organizations, including third-party suppliers, retailers, destination companies, and content providers, the report said. Regional forecasts show that the Asia Pacific would reap the most benefits at $10.3 billion in additional revenue, followed by Europe with $8.2 billion, and North America with $7.6 billion.