Emma Kelly/London
The in-flight-entertainment (IFE) industry has undergone a radical change this year, with the leading hardware providers finally conceding that they are guilty of over-promising and under-delivering to their airline customers. After years of trying to meet airline requests for ever-more ambitious IFE applications, the makers have admitted that they cannot do what they have been claiming for the past few years - at least not yet.
Manufacturers and airlines have discovered this the hard way, however, with interactive IFE programmes failing, resulting in a lack of confidence and disillusionment on the part of many airlines. "Two years ago, airlines looked ahead to the new era of in-flight entertainment, but something has gone seriously wrong and we have come down to earth with a bump," says Alistair Cumming, British Airways chief operating officer and director of profit development.
Airlines have been tolerant and have stuck with their IFE vendors, despite programme delays and reliability problems, and only now are they on the verge of seeing some of the promised capabilities of IFE equipment, Cumming believes. BA can speak from first-hand experience, with the airline now encountering a two-year delay in the launch of its interactive IFE trial using B/E Aerospace's (BEA) Multi-media Digital Distribution System (MDDS).
In 1995, BA announced plans to test the MDDS on a Boeing 747-400, to evaluate passenger reaction to a range of services including video-on-demand, audio-on-demand, in-flight shopping, reservations services, personal-computer games, information services, in-flight gambling and telephony.
If the trial is successful, the airline plans to outfit all three classes in its widebody fleet under a $155 million contract, with the possibility of this increasing to $225 million, if an additional undisclosed number of aircraft is equipped.
Pending a successful outcome of the flight trial, commercial deliveries are due to start in early 1998. BA has announced so many dates for the launch of the trial (and failed to meet them because of reliability problems) that it no longer talks about it. BA denies that relations with BEA are under strain because of the delay. A launch in the next couple of months is now likely.
BA is not alone. "From my perspective, the IFE industry today stands as a mix of unreliable hardware, bug-ridden software, broken promises and unhappy passengers," says Cathay Pacific manager of product development Tony Hellyer. Cathay should know. The Hong Kong-based carrier was forced to reduce the interactive element of its IFE offering earlier this year, following reliability problems. "We have found that the suppliers of interactive IFE have not been able to offer us reliable systems, so we have decided to take a more conservative approach until we can offer complete reliability," says Nina Grudzien, Cathay's manager of in-flight entertainment and merchandising.
Rising reliability
Cathay has Matsushita's System 2000E installed on 34 aircraft - six Airbus A340s and 11 A330s and six Boeing 747-300s, seven 747-200s and four 777s. Reliability is ranging between 90% and 95%, says Grudzien, adding that Cathay's expectations are closer to 100%. Cathay will continue to work on reliability with Matsushita and will watch the interactive market, but will take a back seat for a while, says Grudzien, adding that the airline hopes to implement full interactivity by January 1998.
Virgin Atlantic, too, has experienced setbacks with its IFE programme, suffering reliability problems with the Hughes-Avicom hardware in the early days of its Arcadia IFE programme. Nonetheless, the airline appears to have encountered a relatively smooth launch of its latest IFE offering - Odyssey - which uses the Matsushita 2000E platform. It was launched in April on Virgin A340s and is progressively being added to six A340s by year-end, at a cost of £1.7 million ($2.7 million) an aircraft. "There have been a few little bugs, but nothing major," says Lysette Gauna, Virgin's in-flight-entertainment manager.
One of the few airlines persevering with interactivity, and one which appears to be having relative success, is Singapore Airlines (SIA). The carrier's KrisWorld package of in-flight entertainment and communication services, using the Matsushita platform, has 21 video channels, 12 audio channels, ten Nintendo games, real-time news, information services and telephone service. In addition, the airline is on the verge of launching in-flight gambling. SIA is aiming for 99% IFE in-seat reliability this year, says IFE engineer Darrel Chua. "We are almost at 99%, but my personal target for this year is 99.5%," he says.
SIA has worked closely with its IFE vendors and has set high targets for them to ensure a successful IFE programme. The airline has had to increase significantly its maintenance team since the launch of interactive entertainment. A dedicated group of engineers has been established to catch cabin problems. SIA demands reliability from its IFE vendors. Chua says: "Our aircraft are not testbeds for hardware or software suppliers. Equipment needs to be tested on the ground beforehand."
Not surprisingly, having seen numerous failures and reliability problems, a lot of airlines are reluctant at this stage to make the huge investment in interactive IFE systems. Many are stepping back and waiting until reliability targets can be met. "We are taking a viewing seat - looking at equipment and waiting until the systems are more reliable before we make any decisions," says Joe Leach, onboard-programmes manager at Delta Air Lines.
Stopgap measures
Like other carriers, Delta has recently equipped its long-haul fleet with the Sony Video Walkman as a stopgap before it decides on new interactive IFE hardware. "This is an interim measure. For the long term, we are still planning to install a fully interactive, in-seat, IFE system, but we are not comfortable with interactive IFE systems at the moment," Leach says. Delta hopes that, by the middle of 1998, technology and reliability will be at a greater level, leading to interactive IFE installations on Delta's long-haul fleet by the beginning of 1999.
Many airlines share that view. "When you show me an interactive system that's up and running and reliable, then I'll go for interactivity," says Karen Schipper, in-flight-services manager for El Al of Israel.
The most recent airline to drop interactive IFE plans is Australia's Qantas. In July, the airline's board rejected plans to invest in Interactive Flight Technologies' (IFT) In-Flight Entertainment Network (IFEN) for a fleet of 48 long-haul aircraft. The installation of new IFE was to be part of Qantas' Flying Towards 2000 programme, which will involve a complete revamp of the airline's international product, including new seats and catering. Despite its failure to win the Qantas order, IFT is confident of future success with its system, according to chief executive Michail Itkis.
Swissair says that it is happy with the IFEN, which is progressively being installed on the airline's Boeing MD-11s and 747s. The airline has found gaming revenues to be significantly lower than expected, however, and is to put the system in first and business classes only and not throughout the aircraft as originally planned.
The problems with interactive IFE cannot be put down entirely to the hardware manufacturers, airlines agree. All involved misjudged the complexity of introducing interactive IFE systems. "The enormity of the task was greatly underestimated. We have struggled with developments, costs have escalated and timescales have fallen apart," says BA's Cummings.
"It seems that since the earliest days of IFE-we have sought to take ground-based products into the demanding airborne environment and expected them to work twice as hard with minimum maintenance," says Cathay's Hellyer. Every generation of IFE equipment has been plagued with reliability problems, and yet, before these problems are solved, manufacturers and airlines embark on the next-generation of IFE equipment, Hellyer suggests.
Airlines have hardly helped the situation by competing through IFE, "-cutting each others' throats" to be first with video on demand and first with interactivity, even though basic capabilities are not reliable, he says.
Equipment manufacturers concede that they have failed to deliver what they promised and have been overtaken by the speed of IFE developments. As Ken McNamara, chief executive of Hughes-Avicom International,says: "One thing we tend to forget is just how far we've come in the last few years. When Hughes-Avicom helped pioneer this industry back in the 1960s, we used the old celluloid film and projector technology. Even as late as the 1980s, we were still basically using tubes and projectors. In the 1990s we have high-powered, small, lightweight computers that drive our systems, but the problem is, even we can't keep up - and I mean 'we' as an industry."
Vendors failed in trying to keep up with airline demands, says McNamara. "In our exuberance to satisfy airline customers with things they can't have yet; in our desperation to field technology that our marketing people sold, but didn't understand; in our rush to lock up market share and be called the winner, something didn't work. This industry didn't deliver," he admits.
The vendors say that failure to deliver is not surprising, and that airlines should not be quick to blame suppliers for reliability problems. "Interactive IFE systems are now stable and maturing. It took almost four years from the first introduction of systems for us to reach this point. We seem awfully impatient with something that is interactive and new technology. We experience computer crashes in our office every day, so we should expect the same with interactive IFE in the aircraft," suggests Brinder Bhatia, senior vice-president at Matsushita Avionics.
It appears that the hardware manufacturers which succeed, or even exist, in the future will be those which can offer reliable systems. All the major hardware manufacturers with products in the market today - BEA, Hughes-Avicom International, Interactive Flight Technologies, Matsushita Avionics and Sony Trans Com - agree that a maximum of three players in the IFE hardware industry will survive over the next three to five years. "Those who can deliver consistent reliability will be the players in IFE-Reliability and performance will be the hallmarks of the successful systems," says Hughes-Avicom's McNamara. Matsushita's Bhatia agrees: "The market is not large enough to sustain the number of players in it today. There will definitely be strategic alliances and consolidation over the next few years."
First alliance
The first such link-up was established in July when Hughes-Avicom finalised a partnership agreement with the Industrial Technology Research Institute and AeroVision Avionics of Taiwan. The alliance, which will strengthen Hughes-Avicom's presence in the important Asia-PacifiÌc region, will result in the joint development and manufacture of IFE systems, based on Hughes-Avicom's existing APAX 150.
The IFE hardware vendors which do survive must work hard to meet airline expectations and regain airline confidence. Carriers need to be patient, however, says McNamara. "We will provide them with the functionalities that they need and want, but it will take time, and they have to be reasonable about costs. We must call upon airlines to work more closely with us to manage risk. If the customer insists on cut-rate prices for unproven technology, they will hamper the industry. To make this a truly healthy and competitive industry, they must buy on performance and pay on performance," he says.
Airlines and vendors have to work together to rid the IFE industry of its current problems, according to industry players. As Cathay 's Hellyer says: "Perhaps it is time that we stopped talking and started working together to develop reliable IFE hardware."
Source: Flight International
