Sky High Economics - Chapter One: Quantifying the commercial opportunities of passenger connectivity for the global airline industry

September 2017

Sky High Economics

The global airline industry is on the cusp of a connectivity revolution. Currently 3.8 billion passengers fly annually, with only around 25% of planes in the air offering them some form of onboard broadband. This is often of variable quality, with patchy coverage, slow speeds and low data limits. By 2035, it is likely that inflight connectivity will be ubiquitous across the world.

Non-broadband-enabled ‘traditional’ sources such as seat upgrades, onboard duty free and baggage fees are currently worth around $60 billion to airlines. For the first time, this research study bridges the gap between current market estimates of traditional revenues and the forecasting of incremental revenue from broadband enabled cabins.

Using IATA passenger traffic data and forecasts of growth, including a near doubling of passenger numbers to 7.2 billion annually, this research study forecasts that broadband-enabled ancillary revenue will reach an estimated $30 billion for airlines by 2035. Overall, a total market of $130 billion of additional revenues will be created. As well as airlines, this market will include content providers, retail goodssuppliers, hotel and car suppliers, airlines and advertisers.

This study comprehensively models the socio-economic impact of the connectivity revolution on the aviation industry. This will include a later report looking at the potential benefits that connectivity will bring to Operations & Safety and the impact of passenger connectivity on Loyalty & Behaviour within the aviation industry.

Read also

Sky High Economics - Chapter Two: Evaluating the Economic Benefits of Connected Airline Operations
June 2018

Sky High Economics - Chapter Three: Capitalising on changing passenger behaviour in a connected world
September 2019


UK media

APEX - "Sky High Economics: In-Flight Broadband, a $130B Market by 2035"
28 September 2017

Bloomberg - "In-Flight Wi-Fi to Make You Worth $4 More to Airlines Every Trip"
26 September 2017

International media

Financial Times - "In-flight WiFi battle over Europe takes off"
5 March 2018

Saudi Gazette - "Broadband in the sky to create $5.2bn market in the Middle East by 2035"
23 January 2018

Industry publications (international)

Connected Aviation Today - "Sky High Economics Report: The Sky is the Limit for Passenger Connectivity"
5 December 2017

Tnooz - "Inflight wifi could be a $130 billion market by 2035"
2 October 2017

Client: Ogilvy
End client: Inmarsat Aviation

Author: Alexander Grous

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