The in-flight entertainment (IFE) industry is gearing up to enter the high-tech world of e-mail and Internet access and carriers are clearly keen to let their customers get their hands on these cutting-edge technologies. Yet the issues of cost and reliability, which dogged the early days of IFE, could slow the process. There is another major technological barrier: data connections to aircraft do not yet provide enough bandwidth for full, live Internet access. But, so far, such problems do not appear to have impeded the frenetic pace of activity.
The four top global suppliers of IFE systems - Matsushita, Rockwell Collins, Sextant In-Flight Systems and Sony Trans Com - are busily marketing their latest-generation products, which all feature audio and video on demand, as well as capabilities for selective Internet access, e-mail and interactive shopping.
Matsushita's state-of-the-art System 3000 has been purchased by four airlines, including Virgin Atlantic. Rockwell Collins has sold its state-of-the-art Total Entertainment System to nine airlines. Sextant's newest m-Series system, meanwhile, has been bought by Japan Airlines and a major European carrier. Customers for Passport, Sony Trans Com's latest IFE system, include South African Airways and Air Canada.
The programming providers are also multiplying partnerships and new product offers. ARINC, the airline-owned US communications organisation, has developed a service with one channel of live television, two audio channels and one high-speed data channel, the latter for an airline's internal communications.
It has struck a partnership with Turner Time Warner to offer TV programming and has signed agreements with other US domestic television networks to offer their shows. ARINC, which has no customers for its service yet, plans to sell airtime to advertisers. These will be customised to each airline's passenger demographics and broadcast during programming.
Ken Malley, vice-president of ARINC's in-flight passenger systems division, says the company is in talks to purchase the equipment and intellectual property rights of Sky Radio, a now-defunct company that created customised audio programming for carriers. Once ARINC signs an airline as a customer, it will proceed with the original plans.
LiveTV, a joint venture between Sextant In-Flight Systems and Harris, which produces an array of satellite communications, transmitter and digital systems, is the company with the highest profile in in-flight programming. LiveTV has developed an in-seat video system that offers passengers 24 channels of satellite TV programming. US launch customers are start-up carriers JetBlue and Legend Airlines. Alaska Airlines is also testing the service. LiveTV's programming in the USA is provided by Direct TV, a digital television entertainment provider, and, because of regulations coming out of the US Federal Communications Commission, is only available on US mainland services. LiveTV says, however, that it may offer similar live, multi-channel satellite TV programming in Canada, Europe, Japan and South America.
The newest entrant in programming is In-Flight Network (IFN), a joint venture launched last month by Rockwell Collins and News Corporation. IFN plans a worldwide launch of its system - with LiveTV, recorded audio and video programming, and broadband Internet access - next year. The company says its programming could be tailored to flight length and specific destinations, and can also be co-branded by the carrier.
Internet access
The technology for airline Internet access, which forms the third pillar of the global IFE sector, is dominated by two companies, one an established player, another an upstart. Both are launching new products. US telecommunications giant, AT&T has developed ePlane service, which will provide Web-based e-mail access as well as access to select content through an intranet. Passengers will be able to use their own laptop modems and AT&T handsets to access an on-board server and the on-line services. This system, which has no airline customers yet, will be tested in the second quarter of this year. It will be rolled out in mid-2001.
The upstart, Tenzing, is an Internet service provider that will let its terrestrial customers go on-line in-flight to send e-mail and view select web sites; passengers will be able to access its on-board server via a high-speed network at each seat. Tenzing will test it on an unnamed airline in the third quarter of this year and release it commercially next year. SITA will provide the satellite link.
Singapore Airlines (SIA) and Virgin are exploring how and when they can offer some of these new services. Dr Teng Kwong Yeoh, SIA's manager of in-flight entertainment, says his carrier aims to offer e-mail access to its passengers within the next 12 months, while Virgin plans to offer its passengers the same service, plus intranet and Internet access, by 2002. In addition, Lisette Gauna, Virgin's IFE manager, says that later this year the airline will test a new "upcalling" telephone system developed with BT, which will let passengers owning mobile telephones forward calls from anywhere in the world to an in-flight telephone.
Despite their plans, SIA, Virgin and other carriers are likely to run up against technical problems in developing and maintaining their IFE systems.
The reliability issue
Reliability is the priority issue. Echoing the sentiments of virtually all of his counterparts around the world, Mark Smith, IFE manager at American Airlines, says: "Our biggest challenge has been, and continues to be, the reliability of our new systems." These, he adds are the equivalent of a local area network (LAN) - the traditional backbone of any networked computing system. "It's not uncommon for us to have problems with our office LAN. Put a LAN on an aircraft and it's in the most hostile environment imaginable. Temperature, humidity and pressure fluctuations are very hard on computers," he says.
Last year, American bought individual, portable Panasonic digital video disc players, equipped with special Bose noise-reducing headsets, for first and business class cabins of its Boeing 767 and MD-11 long-haul aircraft, because "their reliability is not tied to a computer", says Smith.
SIA has earned a reputation not only as a leader in providing the latest in in-flight technology, but also in maintaining it. According to Yeoh, the carrier's goal is to achieve over 99% reliability of its IFE equipment (which means some individual systems might still malfunction on each flight). Starting in the mid-1990s, when it began deploying Matsushita's earlier IFE system, the carrier developed procedures to inspect and maintain all IFE equipment throughout its fleet. Systems on each SIA aircraft are thoroughly checked at least weekly, says Yeoh, taking 35 man hours per aircraft. For some carriers, however, such intense care would be hard to duplicate.
Mary Rogozinski, manager of on-board systems planning for United Airlines, says it is more difficult for United to carry out a weekly maintenance check because of the fleet size and complexity of its network. Clearly, United and other US majors cannot adopt new IFE systems as rapidly as, for example, JetBlue adopted LiveTV.
JetBlue president Dave Barger says: "Being a small company starting with new equipment gives us a competitive advantage. If a major airline wants to go to LiveTV, they can't convert in a timely manner. We decided early on it would be a huge competitive advantage. This is a case where being small is absolutely better. We have the mobility and flexibility to make decisions."
Cost is another factor dissuading airlines from becoming IFE trendsetters. According to Sarah Blomfield, Cathay Pacific manager of products, IFE is an airline's second highest passenger product cost, after the airframe. SIA, for example, is spending $1.3 million per aircraft or $18,500 per first and business class seat - to install Matsushita's AVOO 1.5 IFE system on 15 of its Boeing 747-400s.
High expectations
Living up to expectations for online services has also got IFE executives fretting. "Passengers expect what they have on the ground [online access] they can get in the air. It all seems so simple on the ground, but putting it in place on an aircraft is much harder," says Blomfield.
American's Smith agrees: "The communications path for a moving aircraft is a lot slower than people are used to on the ground." He adds that, nevertheless, American is "evaluating intranet and Internet applications, but we're going to have to walk before we can run". American will test an in-flight e-mail capability later this year, he says.
Market positioning
Regardless of the obstacles, all carriers agree that IFE is a powerful marketing tool. Blomfield says Cathay's IFE system, featuring personal video in all classes on its entire fleet, "marks Cathay out as a premium airline. IFE positions us as innovative and modern." IFE has helped mould the public perception of SIA and Virgin, something that both carriers have deliberately cultivated.
Similarly, Virgin has built its reputation on founder Richard Branson's philosophy of "putting fun back into flying", which places IFE as an integral part of this process. Virgin was the first airline to offer the Sony Walkman - to business class passengers in 1989 - while it introduced a six-channel, individual TV screen system in all classes in 1991, and an interactive entertainment system in individual TVs in all classes in 1993.
Virgin and SIA both believe their systems simultaneously appeal to business travellers and families travelling together on long flights, which makes them a doubly potent marketing tool. "We can market them to children flying in economy, which is a godsend, and also, on the office side, to business class passengers, who pretend they want to stay in touch with the office when all they want to do is watch a movie or play Nintendo," says Virgin's Gauna.
Although JetBlue's longest flight is the 145min New York Kennedy-Fort Lauderdale service, the carrier considers its LiveTV service an equally effective competitive marketing weapon. The New York start-up is charging its passengers $5 per flight for LiveTV, although the service is free to unaccompanied children or to passengers stranded by delays. "It's a nice amenity that we can extend," says Barger. JetBlue expects half of its passengers on flights to Fort Lauderdale and Tampa in Florida to purchase the TV service.
The size of JetBlue and Legend Airlines' systems notwithstanding, their adoption of LiveTV is being closely monitored by their larger brethren. Alaska Airlines, one of the smaller US majors, is testing the system, and says that it could offer the service system wide if its customers react positively.
The initial frenzy to install IFE in the 1990s demonstrates just what a powerful lure hot new seat-back technology can exert on airline marketeers. And at present, live television, along with e-mail and Internet access, is amongst the hottest topics around.
Source: Airline Business
