In-flight broadband to create $5.2 billion market in Middle East by 2035
In-flight broadband has the potential to unlock a $5.2 billion market within the Middle East region by 2035 according to new data released from a report by the London School of Economics and Political Science (LSE) in association with Inmarsat.
The report, ‘Sky High Economics: Quantifying the commercial opportunities of passenger connectivity for the global airline industry’ 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 suggests that airlines will benefit from the new revenue streams of broadband access charges, e-commerce and destination shopping, advertising and premium content. The research argues that as passenger numbers grow, so will passenger expectations for access to high-quality in-flight connectivity.
In terms of passenger value gained through new, Wi-Fi enabled ancillary revenue streams, the data suggest that airlines will benefit from an extra $3.21 per passenger. Currently, airlines average an additional $17 per passenger from ‘traditional’ ancillary services such as duty-free purchases.
The Middle East region continues to represent one of the higher revenue opportunities for both domestic and international full-service carriers (FSC). In 2035, the split is low-fare carriers at $239 million and FSC at $511 million.
“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,” said Ben Griffin, vice president, Middle East, Africa and South Asia at Inmarsat Aviation.
He continued, “Having the right capabilities in place – from the cabin to the cockpit – is the key to benefiting 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.”