Is live in-flight television an answer for low-cost carriers looking for ways to boost revenues and distinguish themselves from competitors?
Had you been travelling on JetBlue Airways’ flight 292 on 21 September last year you could have watched via a seatback screen news footage of your aircraft coming in for an emergency landing following a problem with the landing gear. News crews had been alerted to the drama and were filming the aircraft’s arrival and emergency preparations at Los Angeles International Airport that were screened via the aircraft’s own onboard live television service.

This must surely be the most vivid example yet of the arrival of real-time news, sport and other television scheduling in-flight and not something that everyone would have wanted to watch. Live in-flight television is increasingly being studied by airlines, both as a means of revenue generation as well as differentiating themselves from their rivals.

JetBlue is a keen advocate of live in-flight television – so much so that in September 2002 it bought the company – LiveTV – that had been providing the service on its aircraft. For JetBlue it is very much a question of branding. According to airline branding consultant Paul Sillers: “Live TV and leather seats are the two features most associated with JetBlue. They attracted media attention at a time when other low-cost carriers were offering peanuts.”

Although JetBlue does not charge for its live TV offering, other carriers have opted for a different business model. In 2001 when fellow US low-fare carrier Frontier Airlines decided to switch to an all-Airbus fleet, it opted to install seatback screens and offer live TV and charge passengers $5 to watch it. These charges, says Frontier, cover ongoing fees but are not looked upon as a revenue stream.

According to Frontier there will always be a set number of people prepared to pay for the service and it has proved more successful on stage lengths of over two hours. The carrier’s maximum stage length is around five hours.

Although so far it has very much been focused on the North American market, with Canada’s WestJet another customer and AirTran Airways offering XM Satellite radio via the same system, LiveTV has now added Australian budget airline Virgin Blue to its list.

According to the carrier: “The plan is to have it across the entire fleet eventually and it will be offered on all routes. It will obviously benefit those people travelling on longer sectors such as Sydney-Perth but it will also be great for business travellers flying between Sydney and Melbourne who want to catch the market wrap live or sports fans who don’t want to miss out on the big game.” Virgin Blue plans to roll out the service in the third quarter of the year and says it will charge for usage, but has not yet announced a price.

Upgrade options

Looking to the future, Scott Easterling, sales and marketing manager for LiveTV, says the company is developing possible upgrade options. One possibility is the provision of internet and email to passengers, either by seatback screen or personal laptop.

This enhancement would be welcomed by Frontier, which is now studying wi-fi connection to laptops during its flights. The carrier says that as competitors add enhancements to their service, “in-flight entertainment is a differentiator only as long as it is a differentiator”.

The arrival of the first of JetBlue’s fleet of Embraer 190s saw the introduction of live TV and radio combined, which is being rolled out across all the carrier’s aircraft.

And what are the prospects in other parts of the world? According to Sillers, Australia is likely to be a good market for live television because of the national interest in live sporting events. India too, he suggests, could be fertile territory, as the local passion for cricket is exploited. Jet Airways is indeed looking closely at offering live television both for its domestic and international services, says Rajesh Verma, vice-president customer services & inflight.

On domestic services in India, which are typically from 40min to 2.5hrs in duration, the ability to offer live television is very attractive, he says, especially the country’s extremely popular sitcoms, he says. “In less than a year we will have live TV fitted on our new aircraft deliveries and then we will retrofit it into the current fleet. Our primary idea is to give more and more service on board. We are not looking to earn revenue out of that.”

Jet is talking to suppliers about taking a system that will be capable of handling live TV, internet access and the use of mobile phones, enabling it to offer either service if it wanted to.

Europe, however, may be a tougher nut to crack. Easterling says: “Content in Europe would be much like in the USA. We would work with a customer to select a content provider that offered a wide coverage area. This would provide uniform programming over multiple countries and languages.”

Cultural differences

However, Sillars doubts whether it would be that simple. “Live TV is great for specific markets but will European travellers ascribe value to live sport and news in the same way as Americans and Australians do? It’s a culture specific issue. I can see how growing markets, particularly India, would be a more natural candidate for this type of product where you have a massive domestic market that would want to watch live cricket – and where there would potentially be a profit centre for airlines that might want to charge passengers for viewing important sporting events.

“Europe, by comparison, is a fragmented market with a complex mix of passenger types with diverse interests. The big advantage for a product such as Live TV in Europe is the technical benefit of not having to physically load programme content on to individual aircraft, and this more centralised wireless approach to content delivery has enormous logistical advantages for airlines.” ■


Source: Airline Business