BERLIN/LONDON (Reuters) – Europe’s airlines are racing to add Wi-Fi to their planes, eager to attract Internet-hungry customers in a cut-throat short-haul market and potentially add millions of dollars of revenue through entertainment, services and advertising.
US airline passengers already have a chance of accessing Wi-Fi on 66 per cent of miles flown, against a worldwide average of 24 per cent, according to data from Routehappy, which rates flights worldwide on amenities such as seats and entertainment.
In Europe, adoption of a ground-to-air service such as that in the United States, is harder due to the number of countries in the region, while satellite-based services have been too costly for short flights.
But with more satellites being sent up, bringing costs down, and airlines more aware of the money-making possibilities, price is no longer such a stumbling block, industry watchers say.
Lufthansa, Air France-KLM, Ryanair and Vueling are some of the major European carriers looking at on-board Wi-Fi on short-haul flights, following low-cost carrier Norwegian, which offers it for free on 74 of its 76 Boeing 737s.
As well as potentially charging passengers to stream TV shows and music on their mobile devices during flights of a couple of hours or less, airlines can use onboard connectivity to offer restaurant bookings, shopping or hotel offers in conjunction with advertisers and partners.
“Nowhere else in the world do you get that captive audience where you know everything about the people that got on the plane and what kind of advertisements you should offer them,” said Robin Cole, Vice-President Global Business Development at Global Eagle Entertainment, which provides satellite-based Wi-Fi for airlines Norwegian and Southwest.
Global Eagle is due to trial a fee-paying system on two Air France A320s this summer in conjunction with mobile firm Orange, and believes the retail and sponsorship opportunities of onboard Wi-Fi could boost industry revenues by hundreds of millions of dollars a year.
The revenue opportunities are attracting attention across the European industry, with low-cost carriers particularly quick to move, said AT Kearney consultant Rene Steinhaus. “There’s a huge logic to having Wi-Fi on board, even in Europe,” he said.
Ryanair will use advertising or other revenue streams to ensure Wi-Fi access doesn’t add to its costs, CEO Michael O’Leary said, adding it had begun talks with mobile phone companies over charges, and with technical companies over fitting the lightest possible aerials for the lowest cost.