Ecommerce opportunities of USD 30 bln for airlines – study

Monday 2 October 2017 00:13 CET | News

Airlines could make the most of the in-flight ecommerce by receiving an extra USD 30 billion if passengers were treated as online consumers, study reveals.

In-flight broadband, which will bring new services such as high-speed film and TV streaming and online shopping to passengers, has the potential to create a USD 130 billion global market within the next 20 years, according to a report by the London School of Economics and Inmarsat, the satellite operator.

The share that could be captured by airlines, which would provide access to these services during flights to a captive audience, is forecast to climb from USD 900 million in 2018 to USD 30 billion by 2035. The report estimates that by 2035 this could add USD 4 per passenger to the USD 17 already earned from ancillary services such as in-flight purchases of duty-free goods, or food and drink.

The report estimates that non-broadband enabled extras generate roughly USD 60 billion in supplementary revenue for the world’s airlines. In 2016, the top 10 airlines, ranked by total ancillary revenue, earned USD 28 billion from these add-on services, against USD 2.1 billion in 2007, according to research by IdeaWorksCompany and CarTrawler.

At present, only 53 out of an estimated 5,000 airlines worldwide offer in-flight broadband connectivity, the report finds. Airlines could team up with brands to offer continuous online shopping during the flight, with delivery either to the holiday destination or the home.

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Keywords: ecommerce, online consumers, study, London School of Economics, airlines, Inmarsat
Categories: Payments & Commerce | Ecommerce
Countries: World
This article is part of category

Payments & Commerce