Qatar Airways is aggressively investing in its “connected” strategy this year, according to Babar Rahman, the company’s head of global sponsorships, CSR and In-Flight Entertainment/Connectivity (IFEC). The airline is really stepping up its plans in light of its recent broadband deal with Inmarsat.
However, Rahman believes there is still a lot of confusion among airlines about the types of solutions service providers can offer. “I think the providers have done a good job in confusing the airlines in terms of the different types of satellite capacities and solutions out there,” he says. “From our perspective, we have met every single supplier and looked at every single possibility for what would be available for us now, what would be best for us in the next five years, [and] what would be best in the next 10 years.”
With technology moving so fast, he admits saying today you can provide a certain megabit per passenger, will probably become redundant in two to three years. “We were confused in the beginning when we started meeting all the suppliers. But the approach we have taken is that we focused the requirement around our passengers. So, forget about LEO/GEO satellites and bands and everything else and just look at what the passenger requires and would require, and what is the business view to use this capacity. Based on that, we know exactly how much capacity we need, what technology we need to implement, and we have chosen the suppliers based on that exactly,” he says.
In terms of how much satellite capacity Qatar Airways might need, Rahman admits it will be interesting to see over the next few years if the capacity projections are indeed meeting the actual demand. “Bandwidth cannot be assumed based on user devices. It will typically depend on passenger behavior and the connectivity bandwidth system,” he says.
One of the big challenges for any airline when implementing its In-Flight Connectivity (IFC) strategy is figuring out which business model to use. Some believe the free model will ultimately win out, but given the cost of bringing these services, many, including Rahman, don’t believe that is feasible right now. He says the free model is not realistic unless you have a partner prepared to help with those costs on the backend. He believes the investment is so massive that airlines can’t provide this for free, and that it would not be sustainable in the long-run.
“Even if you look in this part of the world, where some airlines initially gave it for free or almost free, that model has now changed. We changed our model last year; we are increasing our revenue and we won’t go down the path of providing free Wi-Fi,” he says. “You have to look at the partnership model; we have partnered with Ooredoo and, as such, at the moment are not proactively seeking new partners at this stage.”
As well as deciding the most effective model when selling these services to passengers, airlines also need to work with other players such as broadcasters to figure out offers that will strike a chord with them. It will become more than just providing basic connectivity. “Our passengers should not feel isolated from their world back at home and work when in the captive environment in the air. As properties like Amazon Prime, HBO and Netflix continue to grow, people want to watch what they watch on their ground. These partnerships will matter a lot going forward, especially as the internet pipe becomes more accessible in the air,” says Rahman.
Rahman believes IFC services will become a key competitive differentiator between airlines, as they slowly become the norm in the industry. However, in many ways, the challenges are just beginning, given aircraft are only now getting connected.
“Once services become available on board, airlines have to figure out exactly how passengers are using this stuff. Based on that, they have to develop a strategy. You will not know what the passenger needs until you provide the service and what they are essentially using it for. If you look at it today, as the pipe is becoming bigger, the opportunities are becoming bigger as well,” he says. “There is still a debate whether to use [connectivity] for improving the customer experience, just enhance the service, or to monetize it. It really depends on where you are in the world, and the unique aspects of your customer demographics,” adds Rahman. VS