Airlines have been seeking to turn in-flight Wi-Fi into a bigger revenue stream. To achieve this they have been engaging in unexpected partnerships.
BOSTON – According to the newly published Strategy Analytics report “Computing in the Clouds” while 50% of travelers connected to in-airport Wi-Fi just 8% connected to in-flight Wi-Fi.
Airlines have been seeking to turn in-flight Wi-Fi into a bigger revenue stream. To achieve this they have been engaging in unexpected partnerships. JetBlue recently announced plans to partner with Amazon and Southwest with Beats. These partnerships will be ever more important to monetize travelers earning less than $50K as that segment significantly under-indexes in usage while in the air. In fact, this demographic segment represents half the number of sessions on planes that it represents elsewhere. The data indicate that this user segment is impacted by cost – which these partnerships – could help overcome.
Curiously, the group with the most usage is actually those earning between $50K and $75K. This is likely the result of higher earners relying on devices not under measurement – such as PCs – to be productive while working and the likelihood they are able to treat the cost as a reimbursable business expense. Understanding the stratification of users is useful to developing business models that appeal to each unique segment.
According to Joshua Martin, Chief Researcher of the Application Strategy group, “Airlines have a captive audience – and that is hugely valuable – especially to services that are facing entrenched competitors. By creating partnerships airlines offer value to fliers, drive fixed revenue from their Wi-Fi services and allow partners to gain exposure to an audience. It is truly a win-win for all companies involved. We see this as a business model that should be deployed more broadly in airlines and across the travel ecosystem.”
These findings and more will be discussed by Strategy Analytics at the Online Marketing Strategies for Travel Conference in Miami on Wednesday, June 3.
Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.
She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
