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Biometrics and Digital Identity are Key in Ensuring the Future of Air Travel

Guest blog written by John Devlin, co-founder of P.A.ID Strategies, with whom we are partnered on producing a soon-to-be published report on smart airport technologies.

Air travel has been massively impacted and disrupted in the past six months. Until Covid-19 hit, the biggest challenge facing airport operators and airlines was how to cope with an ever-increasing demand for air travel and the limited infrastructure to support it. Now, they are scrambling for survival as the industry has been turned on its head and looking to cut costs and develop new means of handling and processing passengers.

Here are a few points demonstrating how steep a cliff the industry has fallen off:

  • At the height of the pandemic and lockdowns in various countries, passenger volumes were down over 90% and in August were still ~80% down on the same time last year in the peak summer months
  • As a result, the Airports Council International (ACI) stated that airports globally will see an expected drop in income of $104.5 billion in 2020 with passenger volumes revised down from 9.4 to 3.8 billion (a 59.6% decline)
  • Heathrow Airport alone estimates that Covid-19 has cost it £1 billion since March
  • Gatwick Airport, London, announced in its 1H20 results that passenger numbers were down 66% for the first 6 months of the year, with revenues declining 61.3% effecting a loss of £321 million

It doesn’t stop there. Whilst flight volumes are increasing, passenger numbers are lagging. The bulk of an airport’s operating costs are related to airport movements whilst their revenues come from passenger spend, which further increases price pressure on airports.

  • Accordingly, Gatwick has cut CAPEX by £157 million this year and plans cuts of £196 million for 2021 with OPEX reduced by £100 million – but this is by compromising and consolidating air traffic into a single terminal, over 70% of staff furloughed and large scale redundancies are planned

Whilst the numbers are (slowly) ticking upwards, our expectation is that passenger volumes will have only recovered to near 2019 numbers by 2023-24, so it is important for airports and airlines to find new, more efficient ways to operate their businesses and recover at least some of their lost revenues.

New Partnerships, Processes and Strategies to Ensure Survival and Plan for the Future

Airports and airlines are looking to implement solutions to enhance “safety” (or the perception of it) and encourage passengers back to fill the flights that are taking place. There are various approaches and technologies that can help them do this. We initially looked at the adoption of biometrics and digital identity in airports three years ago and there has been an increasing number of pilots and trials in the time since. COVID-19 will only accelerate adoption of eGates and self-service kiosks with airports keen to reduce costs and increase efficiency with more automation so that they can prioritise their resources to where needed given the huge drop-off in passenger volumes.

Additionally, new business models and partnerships are being explored by sector specialists so that airports, airlines and traditional suppliers can work together more closely. There is also a move away from the bespoke solutions typically demanded in aviation to more COTS approaches and more use of the public cloud to knit all the various systems together and reduce costs, improve delivery times, etc.

Further, the sector is looking to reassure travellers by reducing human interactions and minimising necessary contact. The added advantage is that these solutions also (typically) reduce OPEX and increase efficiency, plus give more control and increase digital footprint, which gives more data on users and can help drive further advances with analytics and track and trace (if necessary and acceptable).

A Smarter and Better Passenger Experience Utilising Biometrics, Digital Identity and Mobile

There is even a potential silver lining, once the immediate concerns have been addressed. Whilst numbers are depressed, airports and airlines are able to restructure their businesses and operational processes, form new partnerships, adopt new business models and plan how they will not only recover but build back better. If they are able to garner industry and government support, new standards and processes, based upon smartphones, biometrics and digital identity, can be designed and implemented to give the customer more choice and flexibility without the restrictions of traditional inspections. Want to have your bag-tags automatically printed when you enter the airport? And to create a biometric token when you get to the airport so you can seamlessly make your way through all passenger checkpoints and board your plane without having to repeatedly show your passport and boarding pass? How about checking-in to your flight when checking out of your hotel? Give permission for the airline to share your digital identity with your destination country for quicker passage through customs and border control? Well, soon we may be able to do just that.

Note: P.A.ID Strategies and Valour Consultancy have combined their respective areas of expertise in biometrics, identity, security and aviation to develop a new market research report entitled “The Seamless Passenger Journey in Smart Airports”. The report will assess the potential for biometrics, digital identity and smart solutions for self-service, automation and traveller processing to improve the passenger experience, increase efficiency and build revenue streams for airports and airlines as they initially cope with the disruption resulting from COVID-19 and plan their strategies to recover and build back better. More information and the report proposal can be found here: https://valourconsultancy.com/wp-content/uploads/2020/10/The-Seamless-Passenger-Journey-in-Smart-Airports-Report-Proposal.pdf

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  • At the height of the pandemic and lockdowns in various countries, passenger volumes were down over 90% and in August were still ~80% down on the same time last year in the peak summer months
  • As a result, the Airports Council International (ACI) stated that airports globally will see an expected drop in income of $104.5 billion in 2020 with passenger volumes revised down from 9.4 to 3.8 billion (a 59.6% decline)
  • Heathrow Airport alone estimates that Covid-19 has cost it £1 billion since March
  • Gatwick Airport, London, announced in its 1H20 results that passenger numbers were down 66% for the first 6 months of the year, with revenues declining 61.3% effecting a loss of £321 million
It doesn’t stop there. Whilst flight volumes are increasing, passenger numbers are lagging. The bulk of an airport’s operating costs are related to airport movements whilst their revenues come from passenger spend, which further increases price pressure on airports.
  • Accordingly, Gatwick has cut CAPEX by £157 million this year and plans cuts of £196 million for 2021 with OPEX reduced by £100 million – but this is by compromising and consolidating air traffic into a single terminal, over 70% of staff furloughed and large scale redundancies are planned
Whilst the numbers are (slowly) ticking upwards, our expectation is that passenger volumes will have only recovered to near 2019 numbers by 2023-24, so it is important for airports and airlines to find new, more efficient ways to operate their businesses and recover at least some of their lost revenues. New Partnerships, Processes and Strategies to Ensure Survival and Plan for the Future Airports and airlines are looking to implement solutions to enhance “safety” (or the perception of it) and encourage passengers back to fill the flights that are taking place. There are various approaches and technologies that can help them do this. We initially looked at the adoption of biometrics and digital identity in airports three years ago and there has been an increasing number of pilots and trials in the time since. COVID-19 will only accelerate adoption of eGates and self-service kiosks with airports keen to reduce costs and increase efficiency with more automation so that they can prioritise their resources to where needed given the huge drop-off in passenger volumes. Additionally, new business models and partnerships are being explored by sector specialists so that airports, airlines and traditional suppliers can work together more closely. There is also a move away from the bespoke solutions typically demanded in aviation to more COTS approaches and more use of the public cloud to knit all the various systems together and reduce costs, improve delivery times, etc. Further, the sector is looking to reassure travellers by reducing human interactions and minimising necessary contact. The added advantage is that these solutions also (typically) reduce OPEX and increase efficiency, plus give more control and increase digital footprint, which gives more data on users and can help drive further advances with analytics and track and trace (if necessary and acceptable). A Smarter and Better Passenger Experience Utilising Biometrics, Digital Identity and Mobile There is even a potential silver lining, once the immediate concerns have been addressed. Whilst numbers are depressed, airports and airlines are able to restructure their businesses and operational processes, form new partnerships, adopt new business models and plan how they will not only recover but build back better. If they are able to garner industry and government support, new standards and processes, based upon smartphones, biometrics and digital identity, can be designed and implemented to give the customer more choice and flexibility without the restrictions of traditional inspections. Want to have your bag-tags automatically printed when you enter the airport? And to create a biometric token when you get to the airport so you can seamlessly make your way through all passenger checkpoints and board your plane without having to repeatedly show your passport and boarding pass? How about checking-in to your flight when checking out of your hotel? Give permission for the airline to share your digital identity with your destination country for quicker passage through customs and border control? Well, soon we may be able to do just that. Note: P.A.ID Strategies and Valour Consultancy have combined their respective areas of expertise in biometrics, identity, security and aviation to develop a new market research report entitled "The Seamless Passenger Journey in Smart Airports". The report will assess the potential for biometrics, digital identity and smart solutions for self-service, automation and traveller processing to improve the passenger experience, increase efficiency and build revenue streams for airports and airlines as they initially cope with the disruption resulting from COVID-19 and plan their strategies to recover and build back better. More information and the report proposal can be found here: https://valourconsultancy.com/wp-content/uploads/2020/10/The-Seamless-Passenger-Journey-in-Smart-Airports-Report-Proposal.pdf [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Re-Imagining the Passenger Experience in a Post Coronavirus World

Airlines the world over have grounded large parts of their fleets and announced plans to lay off thousands of staff as they attempt to survive a near shutdown of international travel amid the widening coronavirus pandemic. The severity of the crisis has prompted carriers to turn to governments for a lifeline and according to IATA, the global industry needs bailout measures of between $150 billion and $200 billion if it is to survive. And even then, the pandemic is likely to reshape the industry with many airlines sadly failing and entirely new groupings emerging. It will also have huge ramifications for the way people fly once this is all over and whilst it might not seem like a high priority right now, airlines need to think about how they’ll adapt to the needs of entirely different passengers post coronavirus.

It goes without saying that there will be a huge amount of trepidation about travelling for many years once a semblance of normality resumes – especially amongst those from countries that have been hardest hit by the outbreak. Face masks and maybe even gloves will become standard garb for passengers keen to minimise their risk of infection, cleaning routines between turns will be stepped up a level or two and extra screening measures to detect signs of fever could emerge as the new norm in an already stressful airport experience. Even so, these steps will not be enough to reassure many passengers of their safety on-board and their behaviour will change forever. And by extension, so too will the way in which they interact with on-board technology.

While airlines will no doubt shout from the rooftops about how thoroughly they clean and disinfect tray tables, in-flight entertainment (IFE) screens and head rests pre- and post-flight in this brave new world, it is not hard to imagine passengers adopting a cocoon-like state during their journey, fearful of what, and who, they might come into contact with.

This could very well entail reduced interaction with seatback screens and passenger control units (PCUs), with a possible knock-on effect for ancillary revenue generation through these systems. Expect IFE vendors to ratchet up the wellness angle another notch and mimic seat manufacturers in announcing new, self-cleaning screens that involve the use of antimicrobial coatings. Panasonic Avionics has already moved in this direction with its nanoe air filtration system, a feature of the forthcoming NEXT platform that can extract pungent smells from the cabin and remove airborne pathogens.

New user interface technologies like eye-tracking and gesture control could also have an important role to play. Thales has previously demonstrated a prototype for next generation business-class seats, which include iris-tracking to detect when passengers are looking away or when their eyes are closed. However, both technologies are clearly immature in terms of their use on-board aircraft and far from perfect replacements for the touchscreen we’ve all become accustomed to using with expert dexterity. Indeed, it could even be that hand or arm gestures from those in adjacent seats actually decreases the feeling of distance – a concept all of us are rapidly becoming familiar with.

Despite growing familiarity with smart speakers in our everyday lives, it seems a stretch to imagine that voice control will soon become the de-facto IFE control mechanism. Offline voice recognition of multiple languages/accents would presumably take a fair bit of computing power, while in-flight connectivity (IFC) – if it is even installed alongside IFE – is not quite at the point where it could handle the sending and receiving of a huge amount of data packets to and from the cloud for analysis. Nor could cash-strapped airlines afford the associated bandwidth costs. And then there’s the not-so-trifling issue of how to filter out the array of always-present background cabin noise.

More likely then is the use of the passenger PED as a remote control for the screen in front. Interaction with one’s own device is fraught with less “danger” and many of us already use our smartphones to control other smart devices at home. Rather than a YouTube-style PIN approach to pairing PED with seatback, a more hygienic method would surely involve the use of Bluetooth or NFC. Coronavirus or not, Bluetooth will become a standard feature of IFE to enable passengers to use their own headphones and both Safran (Zii) and Panasonic Avionics have recently introduced Bluetooth capabilities on the RAVE Ultra and eX3 and NEXT systems, respectively. NFC, meanwhile, can also be used to process payments from contactless cards and mobile wallets – a key consideration now that the spotlight is firmly on the unhygienic nature of handling cash.

The use of NFC will, of course, have an important role to play as the self-service model rises to prominence. Passengers may limit their interaction with flight attendants and browse digital magazines and food and drink menus on their PEDs or on seatback screens controlled by PEDs instead of flicking through oft-touched paper versions stored in germ-harbouring seat pockets. LEVEL’s award-winning payment system, developed by Black Swan, does just this and can even save card details for simplified repeat purchases on board.

One could even make the argument that coronavirus may finally succeed where IFC and later, wireless IFE (W-IFE), failed in killing off the humble seatback screen. Airlines will be under immense pressure to shed operational spend and the high up-front and on-going costs associated with embedded IFE could be too much for some to bear. How early window content (EWC) – which has helped prolong the life of this form of IFE – is eventually dealt with by Hollywood studios will have a huge bearing on how things eventually pan out. As a result of the pandemic, many of the films that recently hit the big screen or were slated to still be in theatres are instead heading straight to home entertainment release. Trolls World Tour, for example, was due to be in cinemas on April 10th but will now be available on streaming and digital services without making a theatrical debut. This begs the question, for how long will the streaming of EWC to passenger PEDs be prohibited?

The myriad of W-IFE vendors currently active in the market will doubtless be following these events with a keen eye. If more airlines ultimately opt to eschew embedded IFE post coronavirus, what is the optimal way to consume W-IFE? Right now, many systems are installed on aircraft where there is no in-seat power, which is mind-boggling given that the two technologies are inextricably linked. No power? No IFE! And even where in-seat power is present, consuming content on a PED whilst charging the device can be uncomfortable for passengers and becomes more difficult during mealtimes when the tray table is in use. Astronics and SmartTray have sought to provide an answer to this “hold and power” question by developing a dock style wireless charging hinge mechanism integrated into the back of the tray table. Could the next step involve the use of an inductive surface above the meal tray and some sort of PED-sized “pocket” to prevent devices falling to the floor?

While there are several other benefits of inductive charging, there are numerous problems still to be ironed out. For one, the power efficiency of inductive charging pads is currently 60-70%, compared to >90% for traditional outlets. This requires bigger, more expensive power supply units with more heat dissipation, which could nullify, to some extent, any cost savings realised from not installing seatback IFE in the first place. Additionally, wireless charging takes longer, which may be of more concern on shorter journeys where W-IFE is more likely to be installed.

Heightened hygiene and sanitation concerns could, conceivably, impact on newer forms of IFE too. Portable solutions have witnessed phenomenal growth in recent years but their very nature means they are frequently touched by cabin crew, ground handlers, catering and cleaning partners. New “zero touch” portable units that can be plugged into the on-board power supply are not taken on and off the aircraft with anywhere near the same degree of regularity and could be in increased demand going forwards.

There are many unknowns at this still early stage of the outbreak and we really ought to re-iterate that medical experts believe the risk of catching a virus on a flight to be incredibly small. However, it is important for airlines and their suppliers to start looking forward and planning ahead in these unprecedented times. To this end, Valour Consultancy will continue to share unbiased insight and analysis on key trends relating to IFEC and cabin technology and our reports will be as comprehensive as they’ve always been. If you have any questions or queries about our research or want to reach out for a quick chat to brainstorm ideas, our door is always open.

Stay safe and healthy!

Valour Consultancy

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="5303|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]https://valourconsultancy.com/wp-content/uploads/2020/03/12c51ea9ed7611a127aa27f26be64ef1e9390fd9-scaled-e1585144762134.jpg[/fusion_imageframe][fusion_separator style_type="none" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text columns="" column_min_width="" column_spacing="" rule_style="default" rule_size="" rule_color="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""] Airlines the world over have grounded large parts of their fleets and announced plans to lay off thousands of staff as they attempt to survive a near shutdown of international travel amid the widening coronavirus pandemic. The severity of the crisis has prompted carriers to turn to governments for a lifeline and according to IATA, the global industry needs bailout measures of between $150 billion and $200 billion if it is to survive. And even then, the pandemic is likely to reshape the industry with many airlines sadly failing and entirely new groupings emerging. It will also have huge ramifications for the way people fly once this is all over and whilst it might not seem like a high priority right now, airlines need to think about how they’ll adapt to the needs of entirely different passengers post coronavirus. It goes without saying that there will be a huge amount of trepidation about travelling for many years once a semblance of normality resumes – especially amongst those from countries that have been hardest hit by the outbreak. Face masks and maybe even gloves will become standard garb for passengers keen to minimise their risk of infection, cleaning routines between turns will be stepped up a level or two and extra screening measures to detect signs of fever could emerge as the new norm in an already stressful airport experience. Even so, these steps will not be enough to reassure many passengers of their safety on-board and their behaviour will change forever. And by extension, so too will the way in which they interact with on-board technology. While airlines will no doubt shout from the rooftops about how thoroughly they clean and disinfect tray tables, in-flight entertainment (IFE) screens and head rests pre- and post-flight in this brave new world, it is not hard to imagine passengers adopting a cocoon-like state during their journey, fearful of what, and who, they might come into contact with. This could very well entail reduced interaction with seatback screens and passenger control units (PCUs), with a possible knock-on effect for ancillary revenue generation through these systems. Expect IFE vendors to ratchet up the wellness angle another notch and mimic seat manufacturers in announcing new, self-cleaning screens that involve the use of antimicrobial coatings. Panasonic Avionics has already moved in this direction with its nanoe air filtration system, a feature of the forthcoming NEXT platform that can extract pungent smells from the cabin and remove airborne pathogens. New user interface technologies like eye-tracking and gesture control could also have an important role to play. Thales has previously demonstrated a prototype for next generation business-class seats, which include iris-tracking to detect when passengers are looking away or when their eyes are closed. However, both technologies are clearly immature in terms of their use on-board aircraft and far from perfect replacements for the touchscreen we’ve all become accustomed to using with expert dexterity. Indeed, it could even be that hand or arm gestures from those in adjacent seats actually decreases the feeling of distance – a concept all of us are rapidly becoming familiar with. Despite growing familiarity with smart speakers in our everyday lives, it seems a stretch to imagine that voice control will soon become the de-facto IFE control mechanism. Offline voice recognition of multiple languages/accents would presumably take a fair bit of computing power, while in-flight connectivity (IFC) – if it is even installed alongside IFE – is not quite at the point where it could handle the sending and receiving of a huge amount of data packets to and from the cloud for analysis. Nor could cash-strapped airlines afford the associated bandwidth costs. And then there’s the not-so-trifling issue of how to filter out the array of always-present background cabin noise. More likely then is the use of the passenger PED as a remote control for the screen in front. Interaction with one’s own device is fraught with less “danger” and many of us already use our smartphones to control other smart devices at home. Rather than a YouTube-style PIN approach to pairing PED with seatback, a more hygienic method would surely involve the use of Bluetooth or NFC. Coronavirus or not, Bluetooth will become a standard feature of IFE to enable passengers to use their own headphones and both Safran (Zii) and Panasonic Avionics have recently introduced Bluetooth capabilities on the RAVE Ultra and eX3 and NEXT systems, respectively. NFC, meanwhile, can also be used to process payments from contactless cards and mobile wallets – a key consideration now that the spotlight is firmly on the unhygienic nature of handling cash. The use of NFC will, of course, have an important role to play as the self-service model rises to prominence. Passengers may limit their interaction with flight attendants and browse digital magazines and food and drink menus on their PEDs or on seatback screens controlled by PEDs instead of flicking through oft-touched paper versions stored in germ-harbouring seat pockets. LEVEL’s award-winning payment system, developed by Black Swan, does just this and can even save card details for simplified repeat purchases on board. One could even make the argument that coronavirus may finally succeed where IFC and later, wireless IFE (W-IFE), failed in killing off the humble seatback screen. Airlines will be under immense pressure to shed operational spend and the high up-front and on-going costs associated with embedded IFE could be too much for some to bear. How early window content (EWC) – which has helped prolong the life of this form of IFE – is eventually dealt with by Hollywood studios will have a huge bearing on how things eventually pan out. As a result of the pandemic, many of the films that recently hit the big screen or were slated to still be in theatres are instead heading straight to home entertainment release. Trolls World Tour, for example, was due to be in cinemas on April 10th but will now be available on streaming and digital services without making a theatrical debut. This begs the question, for how long will the streaming of EWC to passenger PEDs be prohibited? The myriad of W-IFE vendors currently active in the market will doubtless be following these events with a keen eye. If more airlines ultimately opt to eschew embedded IFE post coronavirus, what is the optimal way to consume W-IFE? Right now, many systems are installed on aircraft where there is no in-seat power, which is mind-boggling given that the two technologies are inextricably linked. No power? No IFE! And even where in-seat power is present, consuming content on a PED whilst charging the device can be uncomfortable for passengers and becomes more difficult during mealtimes when the tray table is in use. Astronics and SmartTray have sought to provide an answer to this “hold and power” question by developing a dock style wireless charging hinge mechanism integrated into the back of the tray table. Could the next step involve the use of an inductive surface above the meal tray and some sort of PED-sized “pocket” to prevent devices falling to the floor? While there are several other benefits of inductive charging, there are numerous problems still to be ironed out. For one, the power efficiency of inductive charging pads is currently 60-70%, compared to >90% for traditional outlets. This requires bigger, more expensive power supply units with more heat dissipation, which could nullify, to some extent, any cost savings realised from not installing seatback IFE in the first place. Additionally, wireless charging takes longer, which may be of more concern on shorter journeys where W-IFE is more likely to be installed. Heightened hygiene and sanitation concerns could, conceivably, impact on newer forms of IFE too. Portable solutions have witnessed phenomenal growth in recent years but their very nature means they are frequently touched by cabin crew, ground handlers, catering and cleaning partners. New “zero touch” portable units that can be plugged into the on-board power supply are not taken on and off the aircraft with anywhere near the same degree of regularity and could be in increased demand going forwards. There are many unknowns at this still early stage of the outbreak and we really ought to re-iterate that medical experts believe the risk of catching a virus on a flight to be incredibly small. However, it is important for airlines and their suppliers to start looking forward and planning ahead in these unprecedented times. To this end, Valour Consultancy will continue to share unbiased insight and analysis on key trends relating to IFEC and cabin technology and our reports will be as comprehensive as they’ve always been. If you have any questions or queries about our research or want to reach out for a quick chat to brainstorm ideas, our door is always open. Stay safe and healthy! Valour Consultancy [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Using Connectivity to Enhance the On-Board Experience and Drive Passenger Loyalty

Countless whitepapers, studies and technical analyses of the connected aircraft have published in recent years. Much of these – including our very own research here at Valour Consultancy – have tended to focus primarily on the potential for airlines to realise cost savings through deployment of various connected aircraft applications. Very few papers have zeroed in on the many ways in which connectivity can be used to indirectly enhance the on-board experience, drive passenger loyalty and boost revenues via increased ticket sales and repeat business. And that’s precisely the angle this new paper – developed in conjunction with our friends at Intelsat – takes.

Click here to check it out and learn about some of the innovative things airlines are doing with today’s connectivity solutions. Hear from industry leaders on pain points, success stories and how they are making passenger connectivity work for their business needs.

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="5240|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]https://valourconsultancy.com/wp-content/uploads/2020/02/VC-Intelsat-Whitepaper-e1581421869696.png[/fusion_imageframe][fusion_separator style_type="none" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text columns="" column_min_width="" column_spacing="" rule_style="default" rule_size="" rule_color="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""] Countless whitepapers, studies and technical analyses of the connected aircraft have published in recent years. Much of these – including our very own research here at Valour Consultancy – have tended to focus primarily on the potential for airlines to realise cost savings through deployment of various connected aircraft applications. Very few papers have zeroed in on the many ways in which connectivity can be used to indirectly enhance the on-board experience, drive passenger loyalty and boost revenues via increased ticket sales and repeat business. And that’s precisely the angle this new paper - developed in conjunction with our friends at Intelsat - takes. Click here to check it out and learn about some of the innovative things airlines are doing with today's connectivity solutions. Hear from industry leaders on pain points, success stories and how they are making passenger connectivity work for their business needs. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

I’ve Got the Power!

I’ve got the power” sang German Eurodance group, SNAP!, in their 1990 smash hit single, “The Power”. Sadly, not every aircraft in every airline in the world can be similarly boastful much to the chagrin of today’s travellers, many of whom cannot bear to be parted from power-hungry personal electronic devices (PEDs) for even the briefest of moments. With the trend towards larger displays in the smartphone market now well and truly established, the demands on batteries are greater than ever. Indeed, it’s not uncommon to see people carrying precious chargers fearful of the likely scenario their device won’t last the day on a full charge. So much so, that a large proportion of us reportedly suffer from a condition known as “low-battery anxiety”.

Airlines have been installing in-seat power systems since the mid-1990s when laptops began to be proliferated. Astronics was one of the first to market when it introduced 12-15V “cigarette lighter” DC plugs on American Airlines and Delta Air Lines. AC power outlets came along in 2000 thanks to KID-Systeme but it wasn’t until 2005/2006 that we saw power supplies being integrated with power units for seatback IFE. Since then, the majority of AC and USB outlets and associated power supplies have been integrated within the IFE architecture. Thus, it is common to see USB outlets embedded either within the screen itself or elsewhere on the seat as a remote jack.

The rapid adoption of in-flight connectivity (IFC) and wireless in-flight entertainment (W-IFE) and a general acceleration in the bring-your-own-device (BYOD) trend over the last few years has resulted in much increased demand for in-seat power. Expectation that connectivity be ubiquitous and also, a significant increase in the penetration of consumer devices being carried on board has propelled the number of aircraft equipped with either standalone IFC, IFC+W-IFE, or standalone W-IFE past the 10,000 mark according to our most recent data.

An Untapped Single-Aisle Segment

A large chunk of these are single-aisle aircraft, which is a market where penetration of in-seat power is currently low (about 20% of single-aisle seats have an in-seat power outlet, compared to about 75% of available seats on twin-aisle aircraft). Strangely, many carriers have not always considered IFC/W-IFE and in-seat power to be complementary technologies that really ought to go hand-in-hand – especially if advertising and e-commerce via PEDs is part of their strategy. This thinking is starting to change, however, as airlines begin breaking down departmental siloes to look at connectivity and associated technologies more holistically. GOL and AirAsia are two examples of airlines that have recently added in-seat power after beginning their respective connectivity rollouts several years ago.

We, therefore, expect the number of single-aisle seats with access to in-seat power to increase to 2.5 million in 2028 (57% of the available total). Cumulative outlet deliveries over this timeframe will be just shy of 3 million, while annual revenues are set to increase from $82 million in 2018 to $129 million in 2028. Much of this growth will be driven by the emergence of USB Type-C with Power Delivery, which can provide up to 60W of power to all types of PED, including laptops, and offers significant cost and weight advantages over 110V AC power systems.

Significant erosion in the ASP of USB systems due to increased competition will serve to dampen this revenue growth somewhat. We already know of vendors that have bid successfully in airline RFPs with solutions priced at less than $275 per seat and even more aggressive pricing can be expected in future. By comparison, an AC power system is estimated to cost in the region of $750 per seat. Today, Astronics and KID-Systeme dominate the market for in-seat power but recent high-profile wins for several newcomers point to a less duopolistic environment in future. IMAGIK (GOL, Air Europa and Neos), Inflight Canada (British Airways, Japan Airlines and Air Transat) and Burrana (a major carrier in Latin America and another in Asia-Pacific) are notable examples, while companies like True Blue Power, Eirtech Aviation Services and Mythopoeia are also picking up business.

110V AC is not Dead…

None of this is to suggest that there won’t be a role for 110V AC power to play in future – there most certainly will be. AC power offers several advantages over USB power – namely its universal nature and the fact specifications are not always changing. Additionally, AC is robust, can charge any device, and outlets normally provide 75 to 95W of power. In premium cabins, airlines will want to continue providing an array of charging options to give passengers as much choice as possible. For this reason, our expectation is that AC+USB combo outlets will be shipped in favour of traditional standalone AC outlets (with no integrated USB ports in the same housing) in all cabins going forward and also, to ease the transition to Type-C while the installed base of compatible PEDs grows. AC will also continue to be adopted for cockpit and galley applications.

While in-seat power is much more commonplace in the twin-aisle market, there is still a significant opportunity to upgrade older systems that provide low power (typically 0.5A or 0.9A). Depending on the power needs of the PED, this may only be sufficient to provide a level or trickle re-charge. That being said, it could be argued that for a passenger who plugs in their exhausted phone at the beginning of a 10-hour flight, only having access to a 0.5A power source will not really matter as it’ll most likely be fully-charged at the end of the journey. Nevertheless, it is clear that as devices become more power hungry and passenger expectation of fast charging becoming engrained, airlines will come under pressure to upgrade such equipment sooner than they might have planned.

Wireless Charging

Passenger expectation of on-board power options may also come to encompass inductive (wireless) charging. Many vendors are seeking to capitalise on airline demand to shorten the cycle time between expectations on the ground (where proliferation of wireless charging spots is rapidly accelerating) and expectations in the air. Indeed, acceptance of the technology is growing with the Wireless Power Consortium recently revealing that 66% of consumers use wireless charging at home. Given the extra real estate with which to play, we initially believed that wireless charging pads would be adopted primarily in premium cabins. But vendors are reportedly seeing interest from carriers keen to deploy the technology in economy cabins too.

Though in-cabin wireless charging has numerous benefits such as obviating the need for passengers to carry charging cables and removing issues with USB sockets being broken/shorted, there are still several problems still to be ironed out. For one, power efficiency of inductive charging pads is currently 60-70%, compared to >90% for traditional outlets. This requires bigger, more expensive power supply units better able to dissipate heat. Second, the cost and complexity of manufacturing wireless charging pads and integrating them into seats is not insignificant. Third, devices must be left on a pad to charge and cannot be moved around or easily operated whilst charging – a problem when it comes to holding a device at a favourable viewing angle. Fourth, there are lots of industry standards to meet (e.g. EMI testing) which are more stringent on aircraft.

Improving Battery Technology

Despite all the above, in-seat power might be considered immaterial if PED battery lives were able to cope with moderate to heavy usage for more than the duration of the longest flights. In airplane mode and with brightness dimmed, tests have shown that a selection of today’s leading smartphones can last well over ten hours on a single charge when left to play back continuous video loops. Obviously, this is not representative of how anyone actually uses their phone and unless the intention is for passengers to consume their own content on their own devices, having Wi-Fi disabled, which considerably prolongs battery life, is not a solution to this dilemma anyway. And even so, it is quite rare for passengers to board a plane with a device that is fully charged.

Battery technology will inevitably improve but presumably not to the point that the in-seat power market will suddenly disappear. Thus far, advances have been largely absorbed by PEDs containing bigger screens, more powerful processors and larger memory and while there are some interesting innovations on the horizon, such as Lithium-air batteries, the demand for in-seat power is only going to increase from here on in.

Valour Consultancy is a provider of high-quality market intelligence. Its latest report “The Future of Aircraft Seating and In-Seat Power” is the newest addition to the firm’s well-regarded aviation research portfolio. Developed with input from more than 30 companies across the value chain, the study includes 93 tables and charts along with extensive commentary on key market issues, technology trends and the competitive environment. For a full table of contents and report scope, visit: https://www.valourconsultancy.com/wp-content/uploads/2019/06/The-Future-of-Aircraft-Seating-and-In-Seat-Power-2019-Brochure.pdf

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_text columns="" column_min_width="" column_spacing="" rule_style="default" rule_size="" rule_color="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""] “I’ve got the power” sang German Eurodance group, SNAP!, in their 1990 smash hit single, “The Power”. Sadly, not every aircraft in every airline in the world can be similarly boastful much to the chagrin of today’s travellers, many of whom cannot bear to be parted from power-hungry personal electronic devices (PEDs) for even the briefest of moments. With the trend towards larger displays in the smartphone market now well and truly established, the demands on batteries are greater than ever. Indeed, it’s not uncommon to see people carrying precious chargers fearful of the likely scenario their device won’t last the day on a full charge. So much so, that a large proportion of us reportedly suffer from a condition known as “low-battery anxiety”. Airlines have been installing in-seat power systems since the mid-1990s when laptops began to be proliferated. Astronics was one of the first to market when it introduced 12-15V “cigarette lighter” DC plugs on American Airlines and Delta Air Lines. AC power outlets came along in 2000 thanks to KID-Systeme but it wasn’t until 2005/2006 that we saw power supplies being integrated with power units for seatback IFE. Since then, the majority of AC and USB outlets and associated power supplies have been integrated within the IFE architecture. Thus, it is common to see USB outlets embedded either within the screen itself or elsewhere on the seat as a remote jack. The rapid adoption of in-flight connectivity (IFC) and wireless in-flight entertainment (W-IFE) and a general acceleration in the bring-your-own-device (BYOD) trend over the last few years has resulted in much increased demand for in-seat power. Expectation that connectivity be ubiquitous and also, a significant increase in the penetration of consumer devices being carried on board has propelled the number of aircraft equipped with either standalone IFC, IFC+W-IFE, or standalone W-IFE past the 10,000 mark according to our most recent data.

An Untapped Single-Aisle Segment

A large chunk of these are single-aisle aircraft, which is a market where penetration of in-seat power is currently low (about 20% of single-aisle seats have an in-seat power outlet, compared to about 75% of available seats on twin-aisle aircraft). Strangely, many carriers have not always considered IFC/W-IFE and in-seat power to be complementary technologies that really ought to go hand-in-hand – especially if advertising and e-commerce via PEDs is part of their strategy. This thinking is starting to change, however, as airlines begin breaking down departmental siloes to look at connectivity and associated technologies more holistically. GOL and AirAsia are two examples of airlines that have recently added in-seat power after beginning their respective connectivity rollouts several years ago. We, therefore, expect the number of single-aisle seats with access to in-seat power to increase to 2.5 million in 2028 (57% of the available total). Cumulative outlet deliveries over this timeframe will be just shy of 3 million, while annual revenues are set to increase from $82 million in 2018 to $129 million in 2028. Much of this growth will be driven by the emergence of USB Type-C with Power Delivery, which can provide up to 60W of power to all types of PED, including laptops, and offers significant cost and weight advantages over 110V AC power systems. Significant erosion in the ASP of USB systems due to increased competition will serve to dampen this revenue growth somewhat. We already know of vendors that have bid successfully in airline RFPs with solutions priced at less than $275 per seat and even more aggressive pricing can be expected in future. By comparison, an AC power system is estimated to cost in the region of $750 per seat. Today, Astronics and KID-Systeme dominate the market for in-seat power but recent high-profile wins for several newcomers point to a less duopolistic environment in future. IMAGIK (GOL, Air Europa and Neos), Inflight Canada (British Airways, Japan Airlines and Air Transat) and Burrana (a major carrier in Latin America and another in Asia-Pacific) are notable examples, while companies like True Blue Power, Eirtech Aviation Services and Mythopoeia are also picking up business.

110V AC is not Dead...

None of this is to suggest that there won’t be a role for 110V AC power to play in future – there most certainly will be. AC power offers several advantages over USB power – namely its universal nature and the fact specifications are not always changing. Additionally, AC is robust, can charge any device, and outlets normally provide 75 to 95W of power. In premium cabins, airlines will want to continue providing an array of charging options to give passengers as much choice as possible. For this reason, our expectation is that AC+USB combo outlets will be shipped in favour of traditional standalone AC outlets (with no integrated USB ports in the same housing) in all cabins going forward and also, to ease the transition to Type-C while the installed base of compatible PEDs grows. AC will also continue to be adopted for cockpit and galley applications. While in-seat power is much more commonplace in the twin-aisle market, there is still a significant opportunity to upgrade older systems that provide low power (typically 0.5A or 0.9A). Depending on the power needs of the PED, this may only be sufficient to provide a level or trickle re-charge. That being said, it could be argued that for a passenger who plugs in their exhausted phone at the beginning of a 10-hour flight, only having access to a 0.5A power source will not really matter as it’ll most likely be fully-charged at the end of the journey. Nevertheless, it is clear that as devices become more power hungry and passenger expectation of fast charging becoming engrained, airlines will come under pressure to upgrade such equipment sooner than they might have planned.

Wireless Charging

Passenger expectation of on-board power options may also come to encompass inductive (wireless) charging. Many vendors are seeking to capitalise on airline demand to shorten the cycle time between expectations on the ground (where proliferation of wireless charging spots is rapidly accelerating) and expectations in the air. Indeed, acceptance of the technology is growing with the Wireless Power Consortium recently revealing that 66% of consumers use wireless charging at home. Given the extra real estate with which to play, we initially believed that wireless charging pads would be adopted primarily in premium cabins. But vendors are reportedly seeing interest from carriers keen to deploy the technology in economy cabins too. Though in-cabin wireless charging has numerous benefits such as obviating the need for passengers to carry charging cables and removing issues with USB sockets being broken/shorted, there are still several problems still to be ironed out. For one, power efficiency of inductive charging pads is currently 60-70%, compared to >90% for traditional outlets. This requires bigger, more expensive power supply units better able to dissipate heat. Second, the cost and complexity of manufacturing wireless charging pads and integrating them into seats is not insignificant. Third, devices must be left on a pad to charge and cannot be moved around or easily operated whilst charging – a problem when it comes to holding a device at a favourable viewing angle. Fourth, there are lots of industry standards to meet (e.g. EMI testing) which are more stringent on aircraft.

Improving Battery Technology

Despite all the above, in-seat power might be considered immaterial if PED battery lives were able to cope with moderate to heavy usage for more than the duration of the longest flights. In airplane mode and with brightness dimmed, tests have shown that a selection of today’s leading smartphones can last well over ten hours on a single charge when left to play back continuous video loops. Obviously, this is not representative of how anyone actually uses their phone and unless the intention is for passengers to consume their own content on their own devices, having Wi-Fi disabled, which considerably prolongs battery life, is not a solution to this dilemma anyway. And even so, it is quite rare for passengers to board a plane with a device that is fully charged. Battery technology will inevitably improve but presumably not to the point that the in-seat power market will suddenly disappear. Thus far, advances have been largely absorbed by PEDs containing bigger screens, more powerful processors and larger memory and while there are some interesting innovations on the horizon, such as Lithium-air batteries, the demand for in-seat power is only going to increase from here on in. Valour Consultancy is a provider of high-quality market intelligence. Its latest report “The Future of Aircraft Seating and In-Seat Power” is the newest addition to the firm’s well-regarded aviation research portfolio. Developed with input from more than 30 companies across the value chain, the study includes 93 tables and charts along with extensive commentary on key market issues, technology trends and the competitive environment. For a full table of contents and report scope, visit: https://www.valourconsultancy.com/wp-content/uploads/2019/06/The-Future-of-Aircraft-Seating-and-In-Seat-Power-2019-Brochure.pdf [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

More Compelling Use Cases Needed to Stimulate Next Wave of IFC Adoption

Earlier this year, I wrote an article which spoke about the industry entering a phase of action rather than talk as various service providers set to work on backlogs built up in recent years. This process began as 2017 came to a close and has continued throughout 2018. A notable and perhaps worrying side effect has been a relative lack of new IFC announcements compared to previous years. With 2019 predicted to be another quiet year as far as announcements go, the key question is why the slowdown and what is needed to bring back momentum?

The majority of early adopters and what might be considered “low hanging fruit” are already offering, or are in the process of rolling out IFC services. According to our quarterly IFC tracker, 91 airlines offered passenger Wi-Fi at the end of June 2018, with many more under contract. There are a significant number of commercial airlines still to target, but the pool of unconnected aircraft is becoming increasingly concentrated with operators that are unconvinced of the business case for IFC and/or cannot afford the upfront CAPEX and subsequent OPEX.

Swaying those that remain unconvinced would perhaps be easier with strong user-cases, but publicly available compelling examples exist today. It is reasonable to assume continued challenges around service consistency, passenger uptake and cost are a factor behind the lack of positive headlines. Average IFC take-rates continue to hover around 5-8% when a paid model is in place, which most airlines feel they must implement to recoup the costs associated with high ongoing service fees. This, in turn, dampens potential ancillary revenue generation from the sale of session passes. For those passengers willing to pay, service consistency is often not where it should be, compounding the issue and causing some airlines to shy away from marketing their IFC service to passengers. Not necessarily the headlines prospective airline customers want to hear.

Of the success stories that have gained traction, the case which arguably stands out the most is Jetblue’s free service with Viasat, mostly because it is one of a few that is endorsed by the airline, passengers and the industry. It also demonstrates how the airline monetised IFC, in this case through its (now scaled back) partnership with Amazon.

With new announcements seemingly on pause, there is a need for more success stories, but first airlines must define what monetising IFC looks like to them and build a strategy around that. It can be easy to assume the answer is for airlines to offer Wi-Fi for free to all passengers. Indeed, IFC take-rates tend to jump to up to around 40% when doing so. But sponsors are proving hard to convince (discussed below) and even if this weren’t the case, the economics of the freemium model doesn’t always stack up today. IFC services would become unusable or cost the airline a small fortune if every passenger on board was to connect. Such a situation would only add more strain on those in the middle layer of the IFC value chain.

Many airlines, therefore, face the decision of charging passengers to access the Internet or absorbing the cost associated with a free service. A tough one to explain to stakeholders looking for a quick return on investment (ROI) – especially now the price of jet fuel is once again marching northward. But airlines are finding ways to limit losses and at the same time find alternative ways to justify ROI beyond simply selling session passes. Some of these approaches are discussed below:

Retaining Top-Tier Customers

Many carriers offer free IFC to frequent and top-tier flyers as a value-added service. In this case, the cost of providing the free service is justified by passenger satisfaction metrics and repeat business.

Increase or Maintain Ticket Sales

More carriers, such as All Nippon Airways, NOK Air and Japan Airlines, offer free Wi-Fi specifically on short-haul/domestic flights to stand out in increasingly competitive local markets. In these circumstances, the cost of providing a free service is assumed to be absorbed in ticket sales.

Tiered Pricing

Where completely free services cannot be accommodated, airlines are deploying tiered packages that allow passengers to access low-bandwidth applications, such as messaging apps, or a “slower” connection for free. Charges are applied to access faster services. This model is similar to what we see on the ground, in hotels for example, and ensures passengers can still surf for free whilst costly data hogs are charged accordingly for using more data.

Sponsorship/Advertising Revenue

An ideal situation for airlines is generating a revenue stream from advertising or sponsorship. This is a path most airlines would like to take, however, very few have made this work. Brands will only come to the fore if they feel there will be enough eyeballs on the screen and this is challenging for airlines with small fleets and for those that achieve IFC take-rates in the low single-digits. Ironically, sponsorship typically frees up airlines to offer a free service in some capacity, increasing take rates and making it an even more attractive offer for brands. But getting over the initial hurdle of demonstrating the ROI to potential advertisers and sponsors is a difficult task.

Cost Savings Through Operational Efficiencies

Some airlines are beginning to offset the cost of providing IFC by moving operational data, such as real-time weather updates, maintenance data and real-time payment verification, over the passenger connectivity pipe. Similarly, crew devices are being connected so that CRM databases can be mined in real-time to enhance the passenger experience and leave a lasting impression. Despite much commentary around the large operational savings that can be made through IFC, few airlines are advanced in their approach to the connected aircraft. But that will change over time and we expect the nose-to-tail story to increasingly resonate – especially amongst notoriously cost-conscious LCCs. Any IFC system that can promise significant savings, or ‘pay for itself’ will almost certainly be of interest.

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="4858|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]http://217.199.187.200/valourconsultancy.com/wp-content/uploads/2018/09/plane-841441_1280-min-1024x680-1.jpg[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text]Earlier this year, I wrote an article which spoke about the industry entering a phase of action rather than talk as various service providers set to work on backlogs built up in recent years. This process began as 2017 came to a close and has continued throughout 2018. A notable and perhaps worrying side effect has been a relative lack of new IFC announcements compared to previous years. With 2019 predicted to be another quiet year as far as announcements go, the key question is why the slowdown and what is needed to bring back momentum? The majority of early adopters and what might be considered “low hanging fruit” are already offering, or are in the process of rolling out IFC services. According to our quarterly IFC tracker, 91 airlines offered passenger Wi-Fi at the end of June 2018, with many more under contract. There are a significant number of commercial airlines still to target, but the pool of unconnected aircraft is becoming increasingly concentrated with operators that are unconvinced of the business case for IFC and/or cannot afford the upfront CAPEX and subsequent OPEX. Swaying those that remain unconvinced would perhaps be easier with strong user-cases, but publicly available compelling examples exist today. It is reasonable to assume continued challenges around service consistency, passenger uptake and cost are a factor behind the lack of positive headlines. Average IFC take-rates continue to hover around 5-8% when a paid model is in place, which most airlines feel they must implement to recoup the costs associated with high ongoing service fees. This, in turn, dampens potential ancillary revenue generation from the sale of session passes. For those passengers willing to pay, service consistency is often not where it should be, compounding the issue and causing some airlines to shy away from marketing their IFC service to passengers. Not necessarily the headlines prospective airline customers want to hear. Of the success stories that have gained traction, the case which arguably stands out the most is Jetblue’s free service with Viasat, mostly because it is one of a few that is endorsed by the airline, passengers and the industry. It also demonstrates how the airline monetised IFC, in this case through its (now scaled back) partnership with Amazon. With new announcements seemingly on pause, there is a need for more success stories, but first airlines must define what monetising IFC looks like to them and build a strategy around that. It can be easy to assume the answer is for airlines to offer Wi-Fi for free to all passengers. Indeed, IFC take-rates tend to jump to up to around 40% when doing so. But sponsors are proving hard to convince (discussed below) and even if this weren’t the case, the economics of the freemium model doesn’t always stack up today. IFC services would become unusable or cost the airline a small fortune if every passenger on board was to connect. Such a situation would only add more strain on those in the middle layer of the IFC value chain. Many airlines, therefore, face the decision of charging passengers to access the Internet or absorbing the cost associated with a free service. A tough one to explain to stakeholders looking for a quick return on investment (ROI) – especially now the price of jet fuel is once again marching northward. But airlines are finding ways to limit losses and at the same time find alternative ways to justify ROI beyond simply selling session passes. Some of these approaches are discussed below: Retaining Top-Tier Customers Many carriers offer free IFC to frequent and top-tier flyers as a value-added service. In this case, the cost of providing the free service is justified by passenger satisfaction metrics and repeat business. Increase or Maintain Ticket Sales More carriers, such as All Nippon Airways, NOK Air and Japan Airlines, offer free Wi-Fi specifically on short-haul/domestic flights to stand out in increasingly competitive local markets. In these circumstances, the cost of providing a free service is assumed to be absorbed in ticket sales. Tiered Pricing Where completely free services cannot be accommodated, airlines are deploying tiered packages that allow passengers to access low-bandwidth applications, such as messaging apps, or a “slower” connection for free. Charges are applied to access faster services. This model is similar to what we see on the ground, in hotels for example, and ensures passengers can still surf for free whilst costly data hogs are charged accordingly for using more data. Sponsorship/Advertising Revenue An ideal situation for airlines is generating a revenue stream from advertising or sponsorship. This is a path most airlines would like to take, however, very few have made this work. Brands will only come to the fore if they feel there will be enough eyeballs on the screen and this is challenging for airlines with small fleets and for those that achieve IFC take-rates in the low single-digits. Ironically, sponsorship typically frees up airlines to offer a free service in some capacity, increasing take rates and making it an even more attractive offer for brands. But getting over the initial hurdle of demonstrating the ROI to potential advertisers and sponsors is a difficult task. Cost Savings Through Operational Efficiencies Some airlines are beginning to offset the cost of providing IFC by moving operational data, such as real-time weather updates, maintenance data and real-time payment verification, over the passenger connectivity pipe. Similarly, crew devices are being connected so that CRM databases can be mined in real-time to enhance the passenger experience and leave a lasting impression. Despite much commentary around the large operational savings that can be made through IFC, few airlines are advanced in their approach to the connected aircraft. But that will change over time and we expect the nose-to-tail story to increasingly resonate – especially amongst notoriously cost-conscious LCCs. Any IFC system that can promise significant savings, or ‘pay for itself’ will almost certainly be of interest.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

How Airlines are Catering to Millennials

Millennials (also known as Generation Y) are a demographic cohort referred to by some as the “Me, Me, Me Generation” – lazy, constantly seeking feedback and prone to jumping from job to job. Others see a group of liberal and upbeat people brimming with confidence and self-expression, who are most receptive to new ideas and ways of living. Whichever side of the fence you sit on, one undeniable trait of millennials is their enormous purchasing power.

For this reason, millennials are one of the most talked about and disruptive generations for businesses globally. Companies, some of which have been household names for generations, have had to fundamentally shift their company culture, redesign products and services, and adopt new, fluid sales channels to resonate with this increasingly important group. Airlines are no exception.

Take Joon, Air France’s new low-cost subsidiary, as an example. The airline launched last year and promises to offer “a global travel experience” as opposed to just a flight and a fare. Part of this experience, somewhat bizarrely, involves a troupe of flight attendants decked out in resplendent white trainers, blazers with rolled up sleeves, polo shirts and ankle-length trousers. However, the “experience” element of the new brand goes a little deeper than a chic uniform. All-too-aware that millennials have grown up with an unmatched presence of technology in their lives, Joon has crafted its in-flight entertainment and connectivity (IFEC) offering accordingly.

First, all seats are equipped with USB ports to allow in-flight charging of personal electronic devices (PEDs). While this is by no means unique, it does point to an understanding that in-flight Internet and wireless content streaming – both of which are being offered by Joon – go hand-in-hand with in-seat power. After all, who boards a plane with a smartphone or tablet that is fully charged? Millennials, who are the likeliest of all to have been glued to their phone on the way to the airport, at the airport, and in the departure lounge, cannot be expected to interact with on-board connectivity if their pocket friends are low on juice! Unfortunately, wireless in-flight entertainment (W-IFE) and in-flight connectivity (IFC) are often deployed without any means to charge the devices that would be used to access these services.

Level, the low-cost arm of the International Airlines Group (IAG), has also put technology at the forefront of its marketing strategy. Its new on-board payment solution, Pair and Play, allows passengers to pay for food, drinks, Wi-Fi, amenity kits and duty-free goods by pairing their mobile devices to the seatback in-flight entertainment (IFE) system. According to Level, its passengers are largely millennials flying long-haul for the first time and being able to pay from their own device is a way for them to have more control of their own experience.

The word “experience” always features prominently in any marketing spiel explaining an airline’s approach to building rapport with millennials. The theory being that millennials, more so than any other demographic, are driven by an experience and being able to share that experience in the moment on social media. And this, in turn, drives greater recognition of the brand among the target audience and with it, customer loyalty and increased revenue.

Delta Air Lines has noticed younger consumers tend to prefer experiences rather than tactile goods, although it favours the term “Emerging High-Value Customers” (eHVCs) over “millennials”. The Georgia-based carrier sees eHVCs as being much more likely to purchase premium products that will enhance their travel experience and has embarked upon a strategy to attract these high-yield future consumers at an early stage. This is why it has placed so much emphasis on the provision of IFC (more than 1,000 planes are now equipped; many with Gogo’s high-speed 2Ku offering) as a way to take business from competitors who offer slow, unreliable Wi-Fi, or no Wi-Fi at all.

JetBlue Airways would doubtless agree about the importance of good-quality in-flight Internet. Its awarded-winning Fly-Fi service has proven extremely popular and has been credited with boosting the airline’s Net Promoter Score, which is a loyalty metric that measures a customer’s willingness to not only return for another purchase, but also make a recommendation to their family, friends or colleagues. Of course, JetBlue offers customers Fly-Fi for free, and very few airlines do that right now for a variety of reasons. Nonetheless, the tech-savvy millennial is used to ubiquitous and free connectivity on the ground, so why should the aeroplane be any different? JetBlue has sought to offset the considerable costs involved with providing complementary IFC – its sponsorship with Amazon brings in valuable revenues and helps underpin the business model.

We are also seeing airlines having to adapt to the way in which millennials engage with content. American Airlines’ decision to forego seatback screens in favour of W-IFE on its Boeing 737 MAX aircraft in mid-2017 raised questions from some about the future of traditional embedded systems. However, many carriers are installing W-IFE alongside seatback screens, especially on their long-haul aircraft. Philippine Airlines, for example, re-introduced embedded IFE systems onto its A330 aircraft in 2017, alongside ONAIR play, its W-IFE solution. One reason for this trend is to allow for ‘second-screening’, a habit most prevalent amongst millennials where people commonly use their PEDs while watching another screen.

Data science company, Black Swan Data, helped the aforementioned Level take second screening a stage further by enabling pairing of a PED directly to the seat-back system via Pair and Play. JetBlue, meanwhile, is using NFC as a binding technology on its newly-restyled A320s. This allows passengers to use their own devices as remote controls/gaming controllers, port Android-based applications and also, stream content to seatback displays.

IFE content is also changing to meet the needs of a younger audience rather than the baby-boomer generation as has been the case in years gone by. On wide-body aircraft, which typically fly routes long enough for people to watch a Hollywood movie, a growing proportion of the video content available is shorter-form with drama series, documentaries and long-running comedy shows becoming more and more popular. Medieval fantasy epic, Game of Thrones, political dramas like House of Cards, and zombie-apocalyptic horror, The Walking Dead, have all gained cult-like status in recent years and represent examples of the content today’s connected generation are enjoying on the ground. In addition, some companies have begun aggregating YouTube and Vimeo shorter snackable video content and offering customised TV channels to airlines. With this demographic expecting connectivity in the air to be more like it is on the ground, it makes sense that the content they view in the air should be of a similar nature to the content they view in their homes.

Next-generation IFEC systems are being architected so that passengers can create and sign into an IFEC account using their social media credentials, and with permission, these systems can learn even more about passengers from their online profile(s) or even the types of emails they send and receive. As a result, it becomes possible to present ads and content that are more compelling, rather than the same thing across the entire cabin. And this is what the millennial passenger expects – most actually embrace recommendation engines from the likes of Amazon and Netflix.

This familiarity with Amazon and Netflix also has an impact on the way in which GUIs are being designed. A good UI should be pretty, intuitive, snappy and put as little space as possible between the passenger and what he or she wants to watch. Delta Air Lines and Turkish Airlines have undoubtedly taken cues from the VOD giants with their recent GUI redesigns. The former’s new look IFE aims to bring important content to the highest levels for ease of access and feel “more like interacting with an iPhone.” The latter’s is the result of a study conducted by professional usability and user experience laboratories. One of the major updates is category filtering for movies or ratings of TV shows and movies from well-known database, Internet Movie Database (IMDb).

And there is much more to come. Virtual Reality (VR) is experiencing a second coming and is a technology many airlines are looking into today. Intriguingly, VR plays to the perceived traits of millennials as it allows passengers to escape the confines of the cabin and therefore the awkward conversation with a stranger, or family member, millennials supposedly prefer to avoid. Joon has committed to deploying SkyLights’ second-generation cinematic VR headset, AlloSky, this year.

In the coming years, we can expect to see more airlines redefine their brand, processes and service to capture the loyalty of millennials. This will become increasingly important and evident as the influence of millennials on economies across the world strengthens. One need only look to the much-changed retail sector and the disruption caused by Amazon to see that the adoption of technology will be fundamental to airlines delivering a passenger experience worth sharing and coming back for.

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="4920|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]http://217.199.187.200/valourconsultancy.com/wp-content/uploads/2018/02/Millennials-1024x530-1.jpg[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text] Millennials (also known as Generation Y) are a demographic cohort referred to by some as the “Me, Me, Me Generation” – lazy, constantly seeking feedback and prone to jumping from job to job. Others see a group of liberal and upbeat people brimming with confidence and self-expression, who are most receptive to new ideas and ways of living. Whichever side of the fence you sit on, one undeniable trait of millennials is their enormous purchasing power. For this reason, millennials are one of the most talked about and disruptive generations for businesses globally. Companies, some of which have been household names for generations, have had to fundamentally shift their company culture, redesign products and services, and adopt new, fluid sales channels to resonate with this increasingly important group. Airlines are no exception. Take Joon, Air France’s new low-cost subsidiary, as an example. The airline launched last year and promises to offer “a global travel experience” as opposed to just a flight and a fare. Part of this experience, somewhat bizarrely, involves a troupe of flight attendants decked out in resplendent white trainers, blazers with rolled up sleeves, polo shirts and ankle-length trousers. However, the “experience” element of the new brand goes a little deeper than a chic uniform. All-too-aware that millennials have grown up with an unmatched presence of technology in their lives, Joon has crafted its in-flight entertainment and connectivity (IFEC) offering accordingly. First, all seats are equipped with USB ports to allow in-flight charging of personal electronic devices (PEDs). While this is by no means unique, it does point to an understanding that in-flight Internet and wireless content streaming – both of which are being offered by Joon – go hand-in-hand with in-seat power. After all, who boards a plane with a smartphone or tablet that is fully charged? Millennials, who are the likeliest of all to have been glued to their phone on the way to the airport, at the airport, and in the departure lounge, cannot be expected to interact with on-board connectivity if their pocket friends are low on juice! Unfortunately, wireless in-flight entertainment (W-IFE) and in-flight connectivity (IFC) are often deployed without any means to charge the devices that would be used to access these services. Level, the low-cost arm of the International Airlines Group (IAG), has also put technology at the forefront of its marketing strategy. Its new on-board payment solution, Pair and Play, allows passengers to pay for food, drinks, Wi-Fi, amenity kits and duty-free goods by pairing their mobile devices to the seatback in-flight entertainment (IFE) system. According to Level, its passengers are largely millennials flying long-haul for the first time and being able to pay from their own device is a way for them to have more control of their own experience. The word “experience” always features prominently in any marketing spiel explaining an airline’s approach to building rapport with millennials. The theory being that millennials, more so than any other demographic, are driven by an experience and being able to share that experience in the moment on social media. And this, in turn, drives greater recognition of the brand among the target audience and with it, customer loyalty and increased revenue. Delta Air Lines has noticed younger consumers tend to prefer experiences rather than tactile goods, although it favours the term “Emerging High-Value Customers” (eHVCs) over “millennials”. The Georgia-based carrier sees eHVCs as being much more likely to purchase premium products that will enhance their travel experience and has embarked upon a strategy to attract these high-yield future consumers at an early stage. This is why it has placed so much emphasis on the provision of IFC (more than 1,000 planes are now equipped; many with Gogo’s high-speed 2Ku offering) as a way to take business from competitors who offer slow, unreliable Wi-Fi, or no Wi-Fi at all. JetBlue Airways would doubtless agree about the importance of good-quality in-flight Internet. Its awarded-winning Fly-Fi service has proven extremely popular and has been credited with boosting the airline’s Net Promoter Score, which is a loyalty metric that measures a customer’s willingness to not only return for another purchase, but also make a recommendation to their family, friends or colleagues. Of course, JetBlue offers customers Fly-Fi for free, and very few airlines do that right now for a variety of reasons. Nonetheless, the tech-savvy millennial is used to ubiquitous and free connectivity on the ground, so why should the aeroplane be any different? JetBlue has sought to offset the considerable costs involved with providing complementary IFC – its sponsorship with Amazon brings in valuable revenues and helps underpin the business model. We are also seeing airlines having to adapt to the way in which millennials engage with content. American Airlines’ decision to forego seatback screens in favour of W-IFE on its Boeing 737 MAX aircraft in mid-2017 raised questions from some about the future of traditional embedded systems. However, many carriers are installing W-IFE alongside seatback screens, especially on their long-haul aircraft. Philippine Airlines, for example, re-introduced embedded IFE systems onto its A330 aircraft in 2017, alongside ONAIR play, its W-IFE solution. One reason for this trend is to allow for ‘second-screening’, a habit most prevalent amongst millennials where people commonly use their PEDs while watching another screen. Data science company, Black Swan Data, helped the aforementioned Level take second screening a stage further by enabling pairing of a PED directly to the seat-back system via Pair and Play. JetBlue, meanwhile, is using NFC as a binding technology on its newly-restyled A320s. This allows passengers to use their own devices as remote controls/gaming controllers, port Android-based applications and also, stream content to seatback displays. IFE content is also changing to meet the needs of a younger audience rather than the baby-boomer generation as has been the case in years gone by. On wide-body aircraft, which typically fly routes long enough for people to watch a Hollywood movie, a growing proportion of the video content available is shorter-form with drama series, documentaries and long-running comedy shows becoming more and more popular. Medieval fantasy epic, Game of Thrones, political dramas like House of Cards, and zombie-apocalyptic horror, The Walking Dead, have all gained cult-like status in recent years and represent examples of the content today’s connected generation are enjoying on the ground. In addition, some companies have begun aggregating YouTube and Vimeo shorter snackable video content and offering customised TV channels to airlines. With this demographic expecting connectivity in the air to be more like it is on the ground, it makes sense that the content they view in the air should be of a similar nature to the content they view in their homes. Next-generation IFEC systems are being architected so that passengers can create and sign into an IFEC account using their social media credentials, and with permission, these systems can learn even more about passengers from their online profile(s) or even the types of emails they send and receive. As a result, it becomes possible to present ads and content that are more compelling, rather than the same thing across the entire cabin. And this is what the millennial passenger expects – most actually embrace recommendation engines from the likes of Amazon and Netflix. This familiarity with Amazon and Netflix also has an impact on the way in which GUIs are being designed. A good UI should be pretty, intuitive, snappy and put as little space as possible between the passenger and what he or she wants to watch. Delta Air Lines and Turkish Airlines have undoubtedly taken cues from the VOD giants with their recent GUI redesigns. The former’s new look IFE aims to bring important content to the highest levels for ease of access and feel “more like interacting with an iPhone.” The latter’s is the result of a study conducted by professional usability and user experience laboratories. One of the major updates is category filtering for movies or ratings of TV shows and movies from well-known database, Internet Movie Database (IMDb). And there is much more to come. Virtual Reality (VR) is experiencing a second coming and is a technology many airlines are looking into today. Intriguingly, VR plays to the perceived traits of millennials as it allows passengers to escape the confines of the cabin and therefore the awkward conversation with a stranger, or family member, millennials supposedly prefer to avoid. Joon has committed to deploying SkyLights’ second-generation cinematic VR headset, AlloSky, this year. In the coming years, we can expect to see more airlines redefine their brand, processes and service to capture the loyalty of millennials. This will become increasingly important and evident as the influence of millennials on economies across the world strengthens. One need only look to the much-changed retail sector and the disruption caused by Amazon to see that the adoption of technology will be fundamental to airlines delivering a passenger experience worth sharing and coming back for. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]