Singapore Airshow: The fight for eyeballs in mid-air
- 11 February 2014
- From the section Business
As we sat down to plan a recent trip that involved taking a flight halfway across the world, I asked my wife if we should fly with a relatively cheaper airline and spend the extra cash on shopping.
After all, we were heading to the US - the land of outlet malls and holiday season sales.
Surprisingly, her answer was a firm no, followed by: "It's close to 20 hours in a plane. I need to be entertained and I am not flying with an airline that doesn't offer good options."
And she is not the only one who looks at that factor when deciding which airline to fly with, especially on a long-haul flight.
"In-flight entertainment is right up there in the priority list of travellers," says Shashank Nigam, chief executive of Simpliflying, a firm that advises airlines on customer engagement.
"When people know they are going to be sitting on the same seat for hours at a stretch, this could be the factor that tilts the balance against, or in favour of, an airline."
Airlines, especially premium carriers, have realised this and are spending hundreds of millions of dollars trying to offer better in-flight entertainment than their rivals.
In July, Singapore Airlines announced a $400m (£243m) deal to equip its new planes with, what it calls, the "world's most advanced in-flight entertainment system to date".
Its new Boeing 777-300ER, Airbus A350 and Airbus A330-300 planes will have touchscreen handsets in all classes and larger screens.
The A350s will also offer broadband internet, mobile phone services, and live TV.
Singapore Airlines is not the only carrier improving its offerings.
Gulf-based Emirates offers Live TV on select Boeing 777 flights flying over the Middle East, Europe, Africa, parts of Asia and North America.
Australian carrier Qantas offers an iPad pre-loaded with 200 hours of entertainment content to passengers travelling on selected refurbished Boeing 767 aircraft.
In December 2012, British Airways became the first UK airline to allow customers on long-haul flights to enjoy in-flight entertainment from the moment they are seated, instead of having to wait until take-off.
"Offering the very best in-flight entertainment is a priority for us," a spokesman for BA told the BBC.
Enhancing its in-flight entertainment services is part of the airline's continuing five-year £5bn investment programme to strengthen the overall offering for customers.
With more than 11,000 planes expected to be sold over the next two decades in Asia-Pacific, demand for such systems is only likely to grow further.
Various companies, including Thales - the world's second-largest maker of such systems - are looking to woo customers at the Singapore Airshow, taking place this week.
"It is the most exciting time for firms making in-flight entertainment solutions," a Thales spokesman told the BBC.
"The demand for airplanes is growing and our industry will grow in tandem."
The firm - which also makes other aerospace products - generated overall revenues of $14.2bn (£8.6bn) in 2012, with in-flight entertainment systems being a key contributor.
According to Thales, the in-flight entertainment system is the second most costly component of a plane after the engine.
Firms are also vying to improve the quality of the systems.
"We are getting closer to offering a similar experience to what passengers would get in their living rooms," Thales said.
'The next level'
The race to attract customers is likely to heat up further as airlines look to offer wireless internet connectivity across the board.
Many carriers do offer this service currently, but the take-up rate among customers has not been that high. In some cases it is too costly for passengers to sign up, while sometimes the connectivity has not been that great.
But with a recent surge in the number of people using devices such as smartphones and tablets, it is a service that airlines cannot afford to ignore.
"Free on-board internet connectivity in all classes of travel is the next level of in-flight entertainment," says Mr Nigam of Simpliflying.
"Airlines can't play the wait-and-watch game on this front anymore."
Mr Nigam explains that on-board connectivity will provide carriers with an opportunity to offer more value-added services and even open up new revenue streams.
"An airline can profile its customers very well and that data is invaluable to companies looking to target a particular segment of clientele," he says.
"You can sell advertising space depending on the routes you are flying, the class of travel and even partner with hotel firms to offer deals on-board."
Companies specialising in the field are sensing an opportunity.
Honeywell Aerospace is displaying its latest technology at the Singapore Airshow which, it claims, will make in-flight connectivity 30 to 40 times faster than current levels, and also bring down costs.
"Passengers can experience internet connections similar to what they would in a downtown Starbucks or McDonald's," says Carl Esposito from Honeywell.
The firm says it is already in talks with various airlines to install the technology and has forecast revenues of nearly $2.8bn over the next 20 years for the product.