2017 may only be a few weeks old but for a number of carriers, particularly those in Europe, it is shaping up to be a landmark year. While in-flight Wi-Fi is already very much the norm on the other side of the Atlantic, European airlines are now racing to provide their passengers with high-quality onboard Wi-Fi.
From a passenger experience perspective, the benefits are obvious. The ability to carry on with your everyday life at 35,000 feet – whether you’re checking emails or streaming from Netflix – is seen as a positive among the majority of travellers, especially on short- and medium-haul services that have previously been starved of connectivity.
Those flying with Lufthansa, Austrian Airlines and Eurowings will soon be able to pay for “home-style” broadband, while the likes of Air France-KLM, SAS, Finnair, British Airways, Aer Lingus and Iberia are among the others whose aircraft have been, or soon will be equipped with the latest generation of connectivity equipment.
Of course, in-flight connectivity is about far more than offering passengers internet access. The FTE Onboard Connectivity 2025 Think Tank highlighted the operational-, crew- and passenger-related opportunities presented by the connected aircraft, but one other big area of opportunity is that of in-flight ancillary sales.
For years, in-flight sales have focused on a predictable selection of products, namely fragrances, watches, spirits and cigarettes. Because of this, passengers have become de-sensitised to the in-flight duty free offer; a fact backed up by the figures.
According to a 2016 report by m1nd-set Generation, duty free sales will double by 2025. The travel retail industry, it states, will experience a compound annual growth rate of +6.8% over the next decade. For most, this makes for positive reading, but for airlines the news is not so good. The report also states that airline duty free sales will experience negative annual growth of -1.5% during the same period. While airport duty free and travel retail sales are expected to rise by +7.1% annually, airlines will be left wondering why they continue to miss out on their slice of the revenue.
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