Airlines will spend 20% less on in-flight entertainment (IFE) hardware in 2009 over 2008, a top industry consultancy predicts.
IMDC, in its very latest forecast, says the decline in IFE expenditure began late last year and is driven by delayed and deferred aircraft deliveries and a reduction in retrofit activity.
"It will take almost three years for airline expenditure to reach 2008 levels," IMDC senior analyst Robert Smith told attendees yesterday at the Inmarsat Aeronautical Conference in Vancouver.
New growth will be driven by "a steady increase in deliveries of twin-aisle aircraft combined with pent-up retrofit demand", adds Smith.
However, in parallel to this, IMDC says in-flight connectivity is increasingly becoming an essential offering. "Generally, airlines are now convinced that connectivity will be a part of the passenger experience," says Smith.
He says that while in-flight voice calling is more desirable in some regions, there is a "consensus that broadband Internet will come in time". Yet, there is "still a gap in who might pay for the equipment".
Pricing for in-flight Internet is expected to be in line with ground services, according to IMDC. As such, Smith issues a word of caution, noting that the price point on the ground is "expected to decrease in coming years".
And, as passengers grow accustomed to high-speed broadband, airlines that offer a more limited service will find it "very hard to charge" for that service.