AIMEing for the top
This post appears on my client’s website www.hmgaerospace.com for whom I am proud to edit Inflight magazine.
On 2 February I moderated a conference at the Aircraft Interiors Middle East show in Dubai. Here are my thoughts.
We had stimulating and useful discussions in our sights as we headed to Dubai for the Aircraft Interiors Middle East (AIME) show this year for our second Inflight workshop and awards at our IFEC pavilion and were not disappointed.
“In the same way it is difficult for an airline to measure the influence IFEC makes on a customer’s purchasing decision, it is difficult for suppliers to justify exhibiting at smaller regional shows. However, the expense of travelling and exhibiting can be considerable. Forums like this one are accessible to a much wider airline audience. Local forums like this provide the opportunity for more in-depth conversations between vendors and airlines, and networking on a more intimate level.”
What an opener from Daniel Kerrison, flydubai’s VP of inflight product. His keynote speech kicked off a fantastic programme of stimulating discussion from some of the industry’s leading lights. Craig Foster, founder of Valour Consultancy, and sometime Inflight contributor moderated the first panel discussion, “Why fly with Wifi?,” which brought together Rockwell Collins’ director Satellite Solutions & Cabin Services Lee Costin, Stephan Egli, OnAir’s chief commercial officer, Ben Griffin, Inmarsat’s regional director for the Middle East, Robin Cole, VP of business development for Global Eagle Entertainment, Dave Skwarek, director of international marketing for Gogo, Guy Christiansen, ViaSat’s director of market development, and Christophe Nagy, Satcom1’s director of Sales & Marketing for EMEA.
The first session touched several nerves across many areas for those assembled. The ideal, as Lee Costin outlined, is for high bandwidth solutions on aircraft to drive the personal experience for passengers. He said: “It opens up a whole raft of value adds for airlines, retail or seatback retail, or other options.”
Ben Griffin added that different airlines have different philosophies. “Emirates’ is different to Qatar’s. Airlines carry different types of passengers and do different types of things. It is a difficult question to answer in one pop. Once a carrier takes a decision to get connectivity on board its fleet or sub fleets, there are also possibilities for flight deck, crew applications and ancillary systems.” On Air’s Stephan Egli pointed out that airlines are looking for both service and revenues. He said: “It is clear to see that the trend of offering wifi free to premium passengers has a dramatic impact on what the opportunities are. Connectivity is a ‘must have’ service, and more and more expect that connectivity to be provided free of charge. We are continuing to see a drive to bring new benefits to airlines in this region.”
ViaSat’s Guy Christiansen, meanwhile, pointed out that the economics bandwidth brings to the market are huge. He claimed that JetBlue passengers experience rates of up to 12 megabits per second. He said: “We’ve seen take rates of on average 43%, but it’s not uncommon to see a 60-90% take rate. The types of ways you can monetise that service are unique. We are talking to airlines that want to sponsor advertising. You go into a portal to start your Internet session. An ad from BMW pops up and arranges a test drive when you land or get home.” He also said that Google is paying JetBlue to have a Google splash page. GEE’s Robin Cole urged attendees to remember that “connectivity is a means to an end, not an end in itself.” She added that it enables other activities, such as advertising and sponsorship by integrating music, movies, and streaming. She said: “It is important to think about what connectivity is offering passengers. It enables richer scenarios. If my IFE is consistent, I feel calm on the plane. Adding connectivity to this gives an opportunity to follow up after the plane has landed, as part of the IFE scenario of happiness and engagement, and additional revenue streams. It enables responsibly monetising pax and bringing in advertisers. There is no more captive or engaged audience than those people on a plane.”
Satcom1’s Christophe Nagy pointed out that the most important thing is to offer and then not deliver a service. suggest to airlines who are thinking about connectivity to give passengers large bandwidth. He said: “There is no point advertising it free when it doesn’t actually work.”
Gogo’s Dave Skwarek added: “We are seeing in the US that the majority of our US partners manage their networks in such a way that they charge more for connectivity. It is important to remember that with the Freemium model strategy, delivering bandwidth and data costs money. There are high costs in the early stage of this industry, and at some point in the value chain someone has to pay, whether it’s airline that subsidise that for passengers, or third party advertisers. We have improved the model in the US market and have 50-60% take rates, but the service suffers as a result.”
Guy Christiansen echoed his thoughts: “JetBlue gives away a basic Internet service – 12mbps each pax. For 9 USD per hour passengers can stream movies or use Netflix. We don’t have the capacity constraints – GX operates in the same kind of frequency band as Ka and is purpose built for broadband. We don’t see the capacity constraints.” Robin Cole explained: “The key thing is what are airlines trying to do? Technology platforms enable certain scenarios. It is a question of understanding what is the brand/strategy. You create brand value by distinguishing the factors between economy class airline-to-airline, region-to-region, short haul vs long haul. The platform is there to enable this.”
However, an overriding theme was the need to improve reliability in all areas – hardware and software. Crew education is another big learning curve. Suppliers have a difficult job turning bandwidth into a meaningful service to passengers.
Another major connectivity theme was nose to tail digital service, with all the major players offering the service in one form or another. The advent of the Boeing 787 Dreamliner, and in particular the Airbus A350 XWB is driving that.
Ben Griffin pointed out that real time engine data is hugely useful, as are telemedicine applications. He said; “If you can avoid diverting an aircraft, you can save up to a quarter million dollars a time – so this pays for the satcom and the kit that goes on board. It is important to harness most value on the investment on the asset and service and do it well by combining cockpit and cabin crew apps, as well as passenger connectivity features.” He added that adding more services to crew tablets is the next logical step for many providers.
I moderated the next two panels, and thoroughly enjoyed the discussions I had with the panellists. The middle session: “Discontent-ed: Seat back or in the lap?” saw Daniel Kerrison speak again, alongside Jon Norris, VP of Sales Lumexis Corporation, Paul Thorpe, President EMEA for digEcor, Robin Cole VP business development, GEE step up again and Guy Christiansen, director of market development Viasat doing a second stint.
Essentially nobody thought there was a move toward “either /or” embedded or wireless systems. Jon Norris pointed out that five years ago IFEC was going to kill seat back IFE, which “didn’t happen.” He believes we will see more wireless networks in cabins in addition to seatback AVOD. He added that 97% of widebody deliveries last year were enabled for IFE. He said: “We will see an increase in wireless and wired, plus a decrease in nothing being offered. Systems that are lightweight, cheap and reliable will win out.”
Another key issue, he highlighted, was “Airlines need to know that if they are going to rely on passenger devices, then they need to provide power. There is often power at the front but not at the back. Due to size restrictions, you cannot put traditional power ports, so it needs to be USB but none in the world have USB 2.1 amp.”
He spoke to the advent of the second screen phenomenon coming, especially with today’s younger generation of travellers and urged: “We need to blend this together. Airlines need to get quicker at installing these things. It takes an eternity to get these line fit offerable. It can take four years, maybe by which time you have missed the technology boat. More and more products will be installed post-delivery retrofits.”
DigEcor’s Paul Thorpe said that his company is “Seeing a great deal of demand for AVOD and that the firm is developing product lines around both seat back and portables.“ he continued: “Our philosophy is enablement – this means that things need to be updateable, modifiable etc as this is up front for airlines.”
Robin Cole talked of the need to think differently when approaching today’s digital market. She spoke of GEE’s partnering of Beats and Southwest, an unlikely pairing. “ We wanted to add some more entertainment elements and looked at SPs to plug-in to the platform for brand awareness. Opposites attract, and the tie in has done both brands good.”
She pointed out that “Most problems with IFE have been solved on the ground – it’s about taking this to the air. We can learn best practices from digital media (i.e. need for a simple UI). Advertising has been solved in the mobile space. We definitely need to look at these examples and apply them to air to fast track learning.” She added: “Charging problems can be solved again from lessons on the ground. What if airlines used inductor pads and offered those in seat back pocket for people to charge phones?”
Daniel Kerrison spoke to the need for seatback when offering early window content. He said: “90% of views on the system are early window content – this is a unique selling point – passengers cannot access this in the terrestrial world, legally, and we cannot stream this to passengers’ own devices.”
He added that IFE is also an eight year purchasing decision for an airline, so has to be easily upgradeable, and discussions are necessary between seating providers as well as IFEC systems manufacturers. He also said that the GUI is critical. He said: “A diverse range of people need to engage with the system.”
The last session of the day was “Retfrofit for purpose” and brought together: Jared Shoemaker, director of Cabin Systems for BAE Systems, Peter Schetschine, VP Customer Affairs for Kid-Systeme, Erhard Berli, senior manager Marketing & Sales EMEA for Astronics, John Edmonson, sales & marketing manager for Panasonic, and Lee Costin again, director Satellite Solutions & Cabin Services for Rockwell Collins.
Erhard Berli spoke to the need for power in refreshing cabins. He said: “A while ago short haul carriers said they don’t need power, but this is changing, 737 operators are now adding it. The main driver is connectivity, and this is not being installed because they like it, they see it as a revenue opportunity. People will pay for power if they get a good service.”
Jared Shoemaker questioned how airlines could provide power in the most effective way. “What enables airlines to communicate stronger brand and compete better?” he asked. “Our system can look at power demand across the whole aircraft. If demand is greater than supply, we can brown out power so that everyone has it for a sufficient period of time.
Panasonic’s John Edmondson said: “We are looking at offering higher power in first class/business class, or a system that can maintain power rather than charge it.” Peter Schetschine from KID Systeme said: “It is mandatory to a good service to offer in seat power. It can get complicated if you look at the choice of entertainment system, Wi-IFE versus seatback, or where the airline flies, whether it is a budget aircraft etc. it is important to separate widebody and narrowbody markets. It is not a question of wi-IFE coming, it has arrived.”
He added that in terms of retrofit: “Airlines are looking to touch aircraft as little as possible and get it back flying. Power is not just for W-IFE scenario, especially short sectors.”
A pilot in the audience added that: “Many systems don’t work together well, they are bloated and have multiple input devices.” He wanted to know whether they could be better integrated. The panellists all agreed that this would be a challenge, however could be improved.
Other issues that came up were the tremendous increase in usage of smartphones with many people bringing two to three devices on board. A key challenge is the right power interface. However, there are USB devices on the market (2.1 amp) that can charge any type of PED. Another issue is managing regular updates of systems – e.g. new Android OS. “This is a tough one,” said Erhard Berli.
All in all stimulating discussions all around, and every panel overran and both Craig and I wanted to ask the panels lots more questions. The audience were also engaged and responsive and wanted to learn more. We gather that booths were busy and conversations continued afterwards. We stopped at shortly after 3.30pm to run the awards ceremony – detailed elsewhere on this site.
Our huge takeaways this year were the need for more crew training, the rise and rise of nose to tail connectivity and demand for higher power, better bandwidth and more realistic published rates as people increasingly bring more devices (and subsequent expectations) into the cabin.
We are, as ever, massively grateful to our panellists and contributors and look forward to seeing you all the same time next year in Dubai for more debate on this fascinating area of the industry.
For a full list of award winners go here.