World: Airlines at risk of missing out on in-flight ecommerce boon
Airlines risk missing out on $30b in extra revenue unless they adapt business models to treat passengers as online consumers rather than travellers, a new study has found. In-flight broadband, which will bring new services such as high-speed film and TV streaming and online shopping to passengers, has the potential to create a $130b global market within the next 20 years, according to a report by the London School of Economics and Inmarsat, the satellite operator. The share that could be captured by airlines, which would provide access to these services during flights to a captive audience, is forecast to climb from $900m in 2018 to $30bn by 2035. The report, to be published on Tuesday, estimates that by 2035 this could add $4 per passenger to the $17 already earned from ancillary services such as in-flight purchases of duty-free goods, or food and drink. Ancillary services have become increasingly important to the world’s airlines as the emergence of low-cost carriers has driven down fares and undermined the hold of legacy airlines on air travel. The report estimates that non-broadband enabled extras generate roughly $60bn in supplementary revenue for the world’s airlines. Alexander Grous, media and communications lecturer at LSE and author of the report, said most carriers remain too focused on the simple service of offering broadband access. For example, airlines could team up with brands to offer continuous online shopping during the flight, with delivery either to the holiday destination or the home, he said. “Airlines have a broadband mindset and have not fully embraced the potential of ecommerce,” he said.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2017-09-26/general/world-airlines-at-risk-of-missing-out-on-in-flight-ecommerce-boon
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World: Airlines at risk of missing out on in-flight ecommerce boon
Airlines risk missing out on $30b in extra revenue unless they adapt business models to treat passengers as online consumers rather than travellers, a new study has found. In-flight broadband, which will bring new services such as high-speed film and TV streaming and online shopping to passengers, has the potential to create a $130b global market within the next 20 years, according to a report by the London School of Economics and Inmarsat, the satellite operator. The share that could be captured by airlines, which would provide access to these services during flights to a captive audience, is forecast to climb from $900m in 2018 to $30bn by 2035. The report, to be published on Tuesday, estimates that by 2035 this could add $4 per passenger to the $17 already earned from ancillary services such as in-flight purchases of duty-free goods, or food and drink. Ancillary services have become increasingly important to the world’s airlines as the emergence of low-cost carriers has driven down fares and undermined the hold of legacy airlines on air travel. The report estimates that non-broadband enabled extras generate roughly $60bn in supplementary revenue for the world’s airlines. Alexander Grous, media and communications lecturer at LSE and author of the report, said most carriers remain too focused on the simple service of offering broadband access. For example, airlines could team up with brands to offer continuous online shopping during the flight, with delivery either to the holiday destination or the home, he said. “Airlines have a broadband mindset and have not fully embraced the potential of ecommerce,” he said.<br/>
