Philip Balaam, president, Inmarsat Aviation, presents the third part of its Sky High Economics research study

Philip Balaam, president, Inmarsat Aviation

At APEX EXPO 2019, Inmarsat presented the third and final part of its Sky High Economics research study, looking at how connectivity will enhance in-flight retail opportunities.

Frequent flyer loyalty is up for grabs, as 450 million less-engaged passengers will change travel plans to fly with an airline that has superior in-flight Wi-Fi connectivity. That’s one of the conclusions of the final chapter of Sky High Economics, the three-part research study from the London School of Economics and Political Science (LSE) in association with Inmarsat, that was released yesterday.

The report, Capitalising on Changing Passenger Behaviour in a Connected World, identifies $33 billion in market share that is the new airline battleground. “This is not something hypothetical in the future, this is something that could be actionable in the very short term,” said Philip Balaam, president, Inmarsat Aviation, in an interview with APEX Media.

Rapidly evolving demographic changes coupled with passengers’ in-flight technology expectations are part of a global shift in traveler attitudes toward airline loyalty. According to the LSE research, millennials are currently the largest passenger group, soon to be followed by the digitally native Generation Z cohort, born between 1997 and 2012.

“The airlines have got to get into more of a retail mindset, with respect to this population, because it really is a retail industry” – Philip Balaam, Inmarsat

“These are not cord cutters, because they’ve never had a cord to cut, they’re just ‘on’ all the time. If you have what they want, they will move and shift to your product and service,” said Baalam.  “It was the rapidity of this potential shift that for me, was the most striking,” he added.

Babar Rahman, vice-president, Marketing, Sponsorships and IFE, Qatar Airways, echoes Balaam: “The study already cements what we calculated before moving to a digitally enabled and broadband-savvy airline. What we see from our airline’s perspective is that the Gen Z will very soon drive even beyond that $33 billion opportunity.”

Only 13 percent of current frequent flyers are active and engaged, while 87 percent are less engaged and brand-agnostic, presenting airlines with the market share opportunity.

“The airlines have got to get into more of a retail mindset, with respect to this population, because it really is a retail industry,” said Balaam. “If you don’t do it, as an airline, or if you don’t do it very well, you can be sure that someone else will.”

Read summaries of part one and part two of the Sky High Economics research study.