Jan. 18 (NBD) -- Run by Hainan Airlines, the first ever flight in China's civil aviation history that allows passengers to use their portable electronic devices (PEDs) like mobile phones onboard took off from Haikou at 9:36pm on Wednesday.  

Airlines rush to offer in-flight Wi-Fi services 

According to a notice issued by the Civil Aviation Administration of China (CAAC) on Tuesday, air carriers can make their own rules for passenger use of electronic devices and apply for approval to the CAAC.

With the lift of the ban on PEDs, passengers are now able to chat, send or receive e-mails, or browse news using in-flight Wi-Fi services. 

China Eastern Airlines is scheduled to allow the use of PEDs on Thursday. Other airlines like Spring Airlines, XiamenAir, and Sichuan Airlines are also evaluating the new services. 

According to information revealed, Hainan Airlines currently has 17 Boeing 787-9 aircrafts equipped with in-flight Wi-Fi facilities, while China Eastern Airlines has 74 planes that are ready to offer the new services, covering all its international long-distance routes and 166 key domestic routes. 

Photo/VCG

In-flight Wi-Fi enhance airlines' competitiveness

Li Xiaojin, director of the institute of air-transport services at Civil Aviation University of China, said that the provision of in-flight connectivity services enables passengers to browse web on the flight, delivering a better user experience and making aircrafts a stronger competitor against high-speed rails. 

His viewpoint was echoed by Lin Zhijie, expert in the civil aviation industry. 

Lin stated that the end of the PED ban on planes is a win-win decision. It will not only improve the traveling experience of passengers, but also will bring enormous changes to the industry. 

For example, the offering of in-flight Wi-Fi services allows passengers to make mobile payment during flights, which accordingly will boost the sales of airlines' value-added services and products such as duty-free items and paid movies, Lin added. 

This will also create huge opportunities for Internet firms, even the wireless communication industry, said Mao Yiqing, secretary-general of the Shanghai General Aviation Alliance and general manager of Oxai Aircraft Co., Ltd.

Initial costs are high yet worth it

Despite numerous advantages like improved comfort and customer satisfaction, in-flight Internet connectivity services involve high up-front costs. 

According to a feasibility report on the use of money raised through private placement in A-share market released by Spring Airlines in 2015, the refitting cost of an aircraft comes at around 7 million yuan (1.1 million U.S. dollars). 

Duan Shiping, CEO of in-flight Wi-Fi provider FeiTian United (Beijing) System Technology Co., Ltd., estimated that a set of in-flight Wi-Fi system is priced at 3-4 million yuan (465,831.3-621,108.4 U.S. dollars). 

Plus engineering costs as well as expenses in airworthiness certificate, software platform, operation and maintenance, and technical support, the initial costs facing airlines with an interest in offering in-flight Wi-Fi services would be about 7-8 million yuan (1.1-1.2 million U.S. dollars) for each airplane. 

However, as compared to the whopping prices of airplanes, the investment in onboard Wi-Fi services would be worthwhile given the direct and indirect benefits that the services will bring to airlines, Duan said. 

Free model, charge model run in parallel 

Allowing passengers to use the Internet onboard is just the first step of airlines, and the future business model for the new services is worth pondering, industry expert Qi Qi suggested. 

Li Xiaojin said that there are two profit models for in-flight Internet access services -- first, airlines or Internet companies directly charge passengers on their mobile phone bills, second, airlines make money by planting ads while offering the services for free to passengers. 

Airline companies should first figure out how to offer the onboard Wi-Fi services, as a kind of basic service or value-added service, industry expert Lin Zhijie pointed out. 

Meanwhile, they should carefully think about how to charge passengers, advertisers, or app stores, by durations or number of visits, or any other standards, he added. 

Mao Yiqing suggested that it is reasonable to charge by connection duration, but airlines should improve technologies to guarantee the charging mechanism, while Duan Shiping told NBD that the free model and charge model can run in parallel, with the first expected to bring the potentials of the industry into full play.  

 

Email: lansuying@nbd.com.cn

Editor: Lan Suying