Friday, October 26, 2018

Can in-flight connectivity, a $2-3 billion opportunity, take off in India?

While it’s easy to stay connected on land, staying connected in the air is a daunting task. In-flight connectivity (IFC) is expected to be a $130 billion market by 2035, contributing $30 billion to airline revenues ($15 billion from broadband access and $15 billion from dependent services such as e-commerce and in-flight advertising). Today, 83 airlines are providing IFC services; it’s expected to reach 100% commercial airlines by 2035. There are 2,695 in-service terminals (flights equipped with Wi-Fi) and are expected to grow to 25,929 flights by 2025. Major airlines such as Emirates, JetBlue, Norwegian, Turkish, Air China and NokAir offer free in-flight Wi-fi service, but the average tariff is $5-10 per hour and $15-20 for a full day service in long-haul flights. Short-haul flights may need to consider alternate revenue mechanisms and provide the service for free.
India is the ninth-largest civil aviation market in the world with 550 aircraft, and annual passenger traffic of 265 million inclusive of 22% international passengers. This is expected to reach 420 million by 2020. Assuming the average annual flying time of 90 minutes in India, passengers stay offline for 400 million hours annually, resulting in productivity loss. Considering the average per hour productivity of $10-15 per person, and 50% travels are work-related, using IFC for one hour an additional opportunity of $2-3 billion can be created while on air travel. The telecom regulator has showed green flag to IFC.
26/10/18 Financial Express

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