I’ve been going over my notes and source material from the Expo a week or so ago and noticed how powerful the inflight entertainment and connectivity movement is becoming for airlines.
It’s no longer about an airline being able to afford an expensive proprietary system. It’s now about hardware vendors bringing fruitful diverse revenue solutions to airlines. For example, I noticed talking to Bluebox how the company is coming up with finance solutions for airlines, from capital loans via investment banks, through to flexible leasing/rental solutions. In some cases recycling the equipment itself – a good idea both from an environmental and economic perspective.
Then I talked to Row44 and was impressed by how much this company has done its homework in retail and ancillary revenues for its airline customers. Initially I had felt that Row44 was based on a small corps of innovative engineers, but talking to the company at the Expo, another more commercial strategy came across, with flexible commercial models for airlines to use. So that airlines are not forced into a standard end user fee. They can choose from more than one business model. And then there is Row44′s walled garden of a portal which also creates ancillary revenues for airlines. There is too much detail involved to go into here. I just want to give you a general impression of the direction that the IFEC industry is heading.
Then there is Airline Services in the UK, building out new hardware for airlines who have obsolete or low performance equipment on board, reluctant possibly to upgrade to a state of the art embedded system. ASL is using its expertise in maintenance of all types of aircraft equipment to offer ruggedised IFE hardware that can be quickly installed and easy to maintain.
Then there is Lumexis, and having spoken to the CEO of their new customer, Flydubai, I can tell you the reason he chose Lumexis was primarily to keep costs down (because, apparently, the system is featherlight) and yet maintain potential for ancillary revenues.
It seems to me that our sector will be responsible for generating new revenue for airlines. It seems to me, that inflight entertainment and connectivity in particular, are going to help airlines get creative about improving profitability. Don’t let’s get sidetracked by the ‘passenger experience’ and generic labels like that. I even personally believe that the more holistic approach towards cabins and interiors is the wrong focus for our market. It is distracting, and we can’t afford to get distracted in these tough economic times. IFEC vendors have got to keep their eye on the ball, not start worrying about how they are perceived in other sectors and the wider family relationship of aviation. It’s time for the hard maths, which is what vendors and airlines are dealing with day to day.
We need to keep this new arithmetical and technological direction on track, and remember, it is those working hard in the IFEC garden shed, tinkering with the technology, playing with new applications, pulling retail brands into the mix, pushing the frontiers of financing solutions, who are driving and will continue to drive, new revenues and new products forward.
