Airlines have the potential to meaningfully increase revenues by selling tickets and ancillary products directly to consumers via digital. Mobile and in-flight media are particularly promising platforms, but just because airlines want to tap into these opportunities doesn’t mean they’ll succeed. Technological impediments and consumer skepticism are causing carriers to face significant barriers, according to a new eMarketer report, “Digital Initiatives for Airlines: Mobile Devices and In-Flight Media Offer Revenue Opportunities.”
Several of the most important airline initiatives focus on customer service. For example, over 90% of senior airline executives polled worldwide by SITA/Airline Business said their companies had either implemented or were in the process of developing passenger services via digital, personalized customer relationship management or expanding ancillary services programs.
This type of customer service not only includes what the airlines provide themselves, such as seat upgrades, meal service and lounge access, but also acting as travel agents for other travel-related products and experiences. A December 2013 survey from digEcor found about half of airline passengers were interested in booking destination-related services while flying.
In October 2013, the Federal Aviation Administration announced airlines could expand passenger use of portable electronic devices during all phases of flight, providing even further marketing opportunities to reach flexible, spontaneous travelers. Airlines’ ability to take advantage of the lengthened in-flight touchpoint is contingent on the implementation and installation of Wi-Fi or airline-provided IFE platforms.
Wi-Fi is currently a catch-22. Better service and more passengers with devices mean more marketing opportunities, but then bandwidth allocation and uninterrupted usage are concerns. Gogo said 70% of surfing on its in-flight networks came from mobile (36% from smartphones; 34% from tablets). Given those figures, most in-flight internet usage isn’t likely geared toward heavy-lifting work sessions, and when consumers are surfing the internet for entertainment—especially over a long period—they’re likely streaming content. As a result, if customers adopted in-flight Wi-Fi en masse, bandwidth would be crushed, and airlines would risk alienating fliers.
If airlines structure content and manage bandwidth strategically, they can capitalize on in-flight media as an advertising platform and a method to sell ancillary products to passengers in real time.
The full report, “Digital Initiatives for Airlines: Mobile Devices and In-Flight Media Offer Revenue Opportunities,” also answers these key questions:
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