The inflight entertainment and connectivity market is expected to register a CAGR of 9.01% during the forecast period, 2019-2024.
- Adoption of IFE systems by LCC operators and the focus of airlines to enhance onboard passenger experience are anticipated to contribute to the growth of the market.
- The adoption of features, such as virtual reality (VR), is expected to generate growth opportunities for the market, in the upcoming period.
- To further increase the bandwidth of inflight connectivity and remove the problems of congestion, researchers are planning to integrate Light fidelity (Li-Fi). The major advantage of Li-fi over current technology is that it offers 1,000 times more the bandwidth compared to that of radiofrequency with a more secure connection. However, the plans of integration might not be immediate (during the forecast period) as this technology is in its nascent stages.
Scope of the Report
Inflight entertainment (IFE) refers to the entertainment available to aircraft passengers, during a flight. Over the years, IFE has expanded to include inflight connectivity (IFC) services, such as internet browsing, text messaging, cell phone usage (wherever permitted), and wireless streaming. Together, they constitute the inflight entertainment and connectivity (IFEC) systems. While hardware includes display screens, remote controllers, headsets/earphones, Wi-Fi routers, antenna, and other connectivity systems; content includes all games, shows and serials, movies, songs, and other audio and video entertainment. This segment also includes software interface on the devices, that makes IFEC available to customers.
Key Market Trends
Increase in Retrofits of Cabin Interiors
Currently, the linefit segment has the highest market share, when compared to retrofit. With cut-throat competition among airlines, the airlines are starting to upgrade amenities like IFEC even in their existing aircraft fleet to stay in the competition. The advent of new technologies has made the passengers expect the airlines to provide them with updated IFEC hardware and high-speed, reliable connectivity. In lieu of the increasing expectations, airlines are upgrading their existing IFEC hardware in order to attract passengers. Furthermore, the software update frequency for the IFEC systems is around 6 months, and some of the hardware components will be compatible with the software upgrades only for a certain number of iterations, after which the hardware needs to be upgraded. Thus, several airlines, such as IDAIR and Lufthansa, are now installing newer IFEC on their flights as a retrofit option.
Rising Investments in Cabin Interior and Aviation Products by Airlines in Asia-Pacific
Several Full-scale carriers (FSCs) and low-cost carriers (LCCs) are opting for integrating IFEC to their service offerings to passengers of both their short-haul and long-haul flights. In July 2019, Air China, the flag carrier of the country, announced its plans to procure 20 new A350-900 aircraft worth around USD 6.54 billion, with deliveries scheduled between 2020 and 2022. Air China operates the Panasonic Avionics Corporation eX3 IFE systems onboard it's fleet of A350s. The eX3 IFE system offers on-demand audio and video services and features an updated content library with a storage capacity of more than 300 movies, 200 TV shows, games, music, moving maps, etc. The rising demand for IFEC systems is driving airlines to collaborate with IFEC system manufacturers, to develop systems that promote the airline’s brand image. Thus, in April 2018, Hainan Airlines signed an MoU with Thales as a strategic IFEC provider for the A350 aircraft in its fleet. In January 2018, Thales was selected to equip the HNA Group airlines with its latest AVANT IFE system on a fleet of 42 wide-body A330 and 17 A350 XWB aircraft, including Thales FlytCARE maintenance services. Airline operators are expected to enhance their service offerings in the upcoming period. Outstanding orders for new aircraft equipped with IFEC systems are anticipated to drive the market prospects in the Asia-Pacific during the forecast period.
The inflight entertainment and connectivity market is moderately fragmented as three key players accounted for close to 49% of the market revenue share in 2018. Panasonic Corporation was the major market revenue shareholder, followed by Gogo LLC. and others. Gogo has increased its installed aircraft base and has successfully entered the Chinese commercial aviation IFEC market. Its systems were installed on over 3000 aircraft as of mid-2019. Its growing base is attributed to the enhanced connectivity services it offers to clients. Going forward connectivity providers are expected to see a growth in their revenue and market presence as the emphasis on augmented data speed grows.
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