AirAsia sees inflight WiFi as next income source

M Saraswathi

KUALA LUMPUR (BERNAMA) – AirAsia has been exemplary in using digital and disruptive technologies in increasing its ancillary income, including the introduction of inflight WiFi, which is expected to create a USD130 billion global market by 2035, according to London School of Economics research.

AirAsia is the pioneer of low-cost airline in-flight WiFi in the region.

“We have about slightly over 50 per cent of our aircraft (in Malaysia) WiFi-enabled. We expect AirAsia WiFi to be installed fleetwide in all AirAsia Malaysia in 2020,” Chief Executive Officer Riad Asmat said.

The other AirAsia companies are expected to follow suit, he said.

“WiFi these days is like oxygen. The moment you sit, the first thing we ask is if it has WiFi. It is slowly gaining traction in the aviation sector,” he told Bernama.

For the Malaysia operation, the flights are all within the one-four hour range.

“Within the AirAsia WiFi ecosystem, the airline has entertainment, we have our e-shop, digital in-flight magazine and some level of entertainment, especially for kids. Besides enhancing the experience of passengers, the service also enables them to connect with their loved ones on air,” said Riad.

“Hooking up to the AirAsia WiFi ecosystem is free (browsing kids entertainment, e-shop and magazine)  but if you want to use your social media or do real work, then you’ve got to pay and I believe our rates are competitive as compared with other airlines around the region,” he said.

AirAsia, a pioneer of low-cost airline in-flight WiFi in the region

A check on the service revealed that the WiFi plans range from RM9 to RM58, with the most basic plan capped at 10MB. There’s also a top-of-the-line 200MB plan, which is best for streaming.

Riad said over 30 per cent of its passengers have accessed the AirAsia WiFi services and the figure is expected to hit 50 per cent soon.

Knowing AirAsia, Riad was also quick to point out that incorporating a lot of its services in the AirAsia WiFi ecosystem would also help them cut costs via fuel saving.

“Once the aircraft is WiFi-enabled the in-flight magazine (hardcopy) should not be there. It is fuel-saving,” he said, adding that although the hardcopy uses some of the lightest paper material available, going 100 per cent digital would save kilos for every fleet.

WiFi is crucial for AirAsia’s business, he said, “It is part and parcel of embracing technology”.

Riad, however, said the portion of WiFi contribution now to its overall ancillary income is negligible.

“But the growth potential is phenomenal because once all the aircraft have the service, people start using depending on the needs of that day. I am sure you can get business out of it, directly and indirectly, especially when passengers browse and make a purchase via OURSHOP,” he said. OURSHOP is AirAsia’s e-commerce platform. However, for the service to have a bigger impact on its ancillary income, Riad said it has to remain attractive, noting the company is constantly on the lookout for more content providers.

AirAsia currently uses the high-speed Ka-band platform, which claims to provide connectivity beyond basic broadband, supporting real-time video, music streaming and more.