Will In-Flight Broadband take off?

Clicking the friendly skies

Laptop PC users may soon be doing more than just playing DVDs when traveling by plane.

Several airlines are testing in-flight broadband, and the market will grow to $936 million in 2012 in worldwide revenues, up from just $6.6 million this year, according to MultiMedia Intelligence (MMI). Without releasing specific figures, the research company also predicted that live in-flight broadcast video revenues would nearly double in 2009.

At a time when airlines are getting negative press for trying to offset rising fuel costs with incremental revenues, (such as by charging for checked baggage), offering speedy Internet to fliers would be a positive step—even with a fee.

Boeing’s in-flight broadband service, called Connexion, ended several years ago. Now there is fresh activity in the sector, using both air-to-ground and satellite-based technologies.

In-flight broadband will be aimed at business travelers at first. Still, according to MMI, discounting service for leisure travelers would be a bad idea. In 2008, leisure users will account for one-half of access sessions in the closely related on-ground Wi-Fi hotspot market.

A similar study conducted for Frost & Sullivan’s “World In-flight Entertainment and Connectivity Market—Investment Analysis” report combined in-flight entertainment with broadband access, resulting in a projected $2.72 billion in revenues in 2012, up from $1.68 billion in 2007.

“An increasing number of airlines are now looking at in-flight entertainment and connectivity as a source of non-seat revenue,” said Rani Cleetez, analyst at Frost & Sullivan, in a statement. “Numerous pilot programs are under way, with JetBlue Airways testing free e-mail and instant messaging services on one of its planes in December 2007. Once successful, JetBlue is likely to charge a fee for the utilization of its Internet services.”

American Airlines, Virgin America and Alaska Airlines are also rolling out or expanding in-flight broadband this year. Frost & Sullivan noted that airlines could not only share the access fees for broadband, but could also capture ad revenues.

Courtesy of http://www.emarketer.com