Airlines are expanding their Wi-Fi services and according to a new global report, are expected to become the industry that spends the most to target mobile consumers.
Tata Consultancy Services predicts that by 2016, airlines will spend $37 million per company on reaching wireless users, up from about $27 million per company in 2012. Airlines, energy companies and telecommunications companies are the three industries spending the most and most often having contact with the mobile audience, with energy companies slightly outspending others in 2012.
Airlines have been laying the groundwork for targeting mobile consumers by expanding their Wi-Fi networks. Recent smartphone panels conducted in five countries by Arbitron concluded that wireless device users, particularly heavy data consumers, rely on Wi-Fi for the majority of their data consumption.
Arbitron said that its smartphone panelists in the United States, United Kingdom, Germany, France and China still consume nearly two-thirds of their mobile data through public and private Wi-Fi hotspots. Users in the United States and United Kingdom consumed the most data, with 61% and 69% respectively coming via Wi-Fi connections.
Chinese and French users were the lightest data consumers on the panel, but panelists in China used Wi-Fi for a whopping 70% of their data consumption. French participants were least likely to use Wi-Fi for mobile data, but still relied on it about half the time. In all five countries, Apple users were the heaviest data consumers and the heaviest users of Wi-Fi. Seventy-two percent of iOS users in the United States and Germany used more than 1,000 megabytes per month, while Android users came in at about a third of that data usage – 821 Mb per month in the United States and 740 Mb in Germany.
Airlines are setting themselves up to reap income from that kind of heavy Wi-Fi use, and consumer expectations of Wi-Fi availability. In January, United installed onboard satellite-based Wi-Fi connectivity on one aircraft for international travelers, and on two planes that fly domestic routes. The company expects to expand the service to 300 more aircraft this year. Pricing is based on speed and the duration of the flight. Standard speed ranges from $3 to $15 per flight, and “accelerated” speed costs between $6 and $20.
Gogo, which provides Wi-Fi connectivity on some of United flights and also provides services for passengers on airlines including Delta, Virgin American and more than half a dozen other airlines, said recently that it expects its movie-streaming product to be available on 1,500 aircraft by the end of this year.
Last month, Southwest Airlines announced that on-demand movies were available on all of its Wi-Fi enabled flights, with movies or streaming television coming directly to customers’ personal devices for $5 per movie or $5 for the television service. The company offers satellite-based Wi-Fi on about two-thirds of its flights for $8 per day, and Southwest said that all of its new planes will also have the satellite-based offerings.
Meanwhile, Skift.com reported this week that JetBlue is considering offering Wi-Fi for free for its passengers.
