Revenue streams for airlines and advertisers from in-flight Wi-Fi could generate US$5.2 billion in the Middle East by 2035, according to research published on Tuesday.
Airlines would account for $1.3bn of the revenues, said the findings of UK-listed satellite firm Inmarsat Aviation and the London School of Economics and Political Science (LSE).
“The latest advancements in satellite technology have unlocked new opportunities for airlines to enhance their passenger experience, increase their operational efficiencies and grow important new revenue streams,” said Ben Griffin, vice-president for Middle East, Africa and South Asia at telecoms firm Inmarsat Aviation.
Inmarsat, which is listed on the London Stock Exchange, provides mobile satellite communications services to global airlines. Its report with the LSE was first published last September and estimates in-flight broadband could reach a $130bn global market by 2035.
This week, the entities publish previously unreleased data showing the estimated size of the in-flight broadband market in the Middle East.
The region would take a 6 per cent chunk of the global market, according to the figures. Middle East airlines are seeking to maximise their revenues amid tough competition and tighter margins.
[ Yahsat to target low-cost carriers, e-commerce firms for in-flight Wi-Fi ]
[ Emirates Airline extends Wi-Fi to nearly half its fleet ]
[ Superfast internet service coming to Etihad flights ]
LSE and Inmarsat’s study says airlines will benefit from four new revenue streams enabled through better in-flight connectivity.
E-commerce and destination shopping, as retailers offer expanded product ranges and real-time offers to passengers in the air, is another. Advertising revenues can also be enhanced through pay-per-click and sponsorship deals. Airlines could seek tie-ups with third parties to provide premium content.
“The airline industry is rapidly evolving across the world, including the Middle East,” said Dr Alexander Grous, a professor in the LSE’s department of media and communications, and author of the report.
“This research shows that airlines have a clear strategic opportunity to become distinctly more retail-focused and reap the benefits of this.”
Regional airlines including Emirates already provide in-flight Wi-Fi of certain speeds to passengers, but UAE satellite operator Yahsat, a unit of Abu Dhabi’s Mubadala Investment Company, last October said it trialled a 50Mbps (megabits per second) in-flight broadband connection, the fastest on the market.
Even faster speeds could be achieved once Yahsat's third satellite comes online in 2018, Yahsat chief executive Masood Sharif Mahmood told The National in November.