Consumers are now connected for almost every waking hour in their everyday lives, as a result of increased engagement with search, social media, e-commerce and streaming. This behaviour provides a compelling business case that airlines can utilise to invest in the connected aircraft, monetising the migration of these consumer activities from the ground to the air and engendering loyalty in the process. The establishment of Millennials in particular as the dominant global consumer segment requires an evolution of the traditionally structured airline loyalty programmes that are, in the main, yet to adapt to the demands and behaviour of younger demographics.
Sky High Economics: Chapter One — Quantifying the commercial opportunities of passenger connectivity for the global airline industry estimated that broadband in the sky will be a $130 billion opportunity by 2035, including $30 billion in digitally enabled ancillary revenue for airlines and a further $100 billion for the wider digital supply ecosystem. The connected aircraft can deliver an additional key benefit for airlines: loyalty. Changing passenger behaviour demands that many miles and card-based loyalty schemes are modernised for younger audiences, with an equally significant opportunity emerging: the provision of tailored inflight services, content, offers and rewards enabled by cabin connectivity that ‘delight’ the consumer. The connected aircraft allows passengers to seamlessly migrate their established digital habits on the ground into the air. With almost 100% saturation of smartphones and a high penetration of secondary devices such as tablets and laptops, the connected cabin can fulfil consumer demand to be ‘always on’. This will drive continued change over the next decade in how travel is researched, booked, and undertaken, with passenger expectation ‘sky high’ on managing their lives, travel and leisure in the air as they would on the ground.
However, airlines are yet to fully embrace the digital landscape: a step-change is required if they are to fully adapt to modern consumer demands and behaviour patterns. This requires the use of data, analytics and an integrated supply chain that can be leveraged by onboard connectivity to tailor experiences to the individual and create a desire to return in the future. Sky High Economics: Chapter Three — Capitalising on changing passenger behaviour in a connected world highlights opportunities for airlines to enhance customer loyalty through onboard connectivity. The alignment of changing consumer expectations and behaviour with a personalised and connected cabin experience can deliver considerable rewards and result in a ‘win-win-win’ for consumers, airlines and suppliers.
Read also
Sky High Economics - Chapter One: Quantifying the commercial opportunities of passenger connectivity for the global airline industry
September 2017
Sky High Economics - Chapter Two: Evaluating the Economic Benefits of Connected Airline Operations
June 2018
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