New FAA Rules Give Airlines a Chance to Market New Wireless Connection Services

The recent rule change by the U.S. Federal Aviation Administration (FAA) to relax restrictions on in-flight wireless devices offers airlines a unique chance to promote their growing Wi-Fi and cellular connectivity services.

“The rising availability of in-flight wireless connectivity comes at a time when the FAA moves to loosen its rules for the usage of electronic devices on flights,” said Heath Lockett, senior analyst for aerospace at IHS.  

Airlines have steadily increased the availability of wireless connection services over the past few years, with the number of commercial aircraft providing either Wi-Fi or cellular connectivity set to reach 4,048 by the end of 2013. This number represents 21 percent of the global fleet, and is up from 15 percent in 2012 and 12 percent in 2011, according to research published by IHS Inc. By 2022, wireless connectivity penetration in commercial aircraft is expected to reach 50 percent.

However, even though airlines are rapidly expanding their services, passengers are still hesitant to fork over the cash to connect.

“The proportion of passengers actually connecting to wireless services on board is still very low, average in the single-digit percentages,” Lockett said. “The great challenge for airlines now is to inform passengers of the services they offer and to get them to pay for access. With the change in FAA rules garnering major attention in the media, the airlines now have a chance to get their message out to U.S. air travelers.”

Airlines typically offer Wi-Fi and/or cellular service to passengers. Wi-Fi is the more common of the two forms of connectivity in North America, likely because cellular connectivity is banned – unlike in other parts of the world. Of the 4,000 aircraft estimated to offer at least one of form of connectivity in 2013, approximately 75 percent offer Wi-Fi only.

In contrast, cellular connectivity has grown across the rest of the world, with almost 600 aircraft projected provide this service by the end of 2013. IHS research has found most passengers are using their cellphones for data services and text messaging instead of phone calls.

Several airlines provide both Wi-Fi and cellular services. Of the 14,000 aircraft that are scheduled to provide some form of connectivity by 2022, approximately 5,000 are projected to offer both Wi-Fi and cellular options. 

Once passengers do sign up for the airlines’ wireless services, IHS predicts another flurry of activity from service providers as they try to provide greater connection speeds to meet the growing demand for bandwidth.