2003 | 2002 | 2001 | Future Calendar

WAEA 24th Annual Conference & Exhibition
9-12 September 2003
Washington State Convention & Trade Center

Modest Growth In IFE Spending Projected For '03 After 11% Decline In '02

Airlines spent approximately US$1.39 billion on inflight entertainment and communication in 2002, an 11% decrease in expenditure from 2001, according to a just-released WAEA study.

However, based on a strong recovery by the air transport market during June 2003, the report forecasts a slight increase in airline expenditure for IFE in 2003 to about US$1.5 billion.

The reduction in IFE expenditure in 2002 reflects the implementation of many of the cost-cutting measures initiated following the disasters in 2001, as well as conflicts in Afghanistan and Iraq, and fears of further terrorism worldwide.

Modest growth in early 2003 was adversely affected by the outbreak of the SARS virus in Asia and Canada. Because the Asia-Pacific region historically has been a very strong area for IFE products and services, the impact on IFE was severe.

"This is not an industry in decline," emphasized Walè Adepoju of Inflight Management Development Centre (IMDC), who headed the research. "This is an industry that is being forced to manage its cash." The level of meetings and development in the industry is continuing "as ferociously as ever. The industry is growing," Adepoju said.

More than 4,980 aircraft, about 43% of the world's commercial fleet, are flying with some form of IFE. Approximately 3,300 aircraft have SatCom capability, which includes telephones and could be used for future passenger data communication. In 2002, airlines exhibited inflight more than 350 movie titles.

The study identified a growth trend among low-fare US carriers providing real-time broadcast television inflight, according to Mark Reed, General Manager, Products for IMDC. At the end of 2002 there were 41 aircraft offering broadcast television. By the end of June, that number had grown to 53. Reed attributes this to JetBlue Airways and Frontier Airlines receiving new aircraft monthly and projects the numbers to increase significantly when Song, Delta Air Lines' low-fare carrier, and WestJet introduce live television.

Long-term IMDC projects broadcast television will remain more popular in the US domestic market on low-fare carriers and low-fare spin-offs of major carriers than on carriers from other countries.

"I think that is probably the big news-what to watch-in North America," stated Adepoju.

Data was compiled from 190 airlines and key suppliers worldwide, including non-WAEA members. The response rate was 35%. Where data was not available, information was estimated based on published IFE service and comparisons to other airlines using revenue passenger kilometers (RPK) and service level.

The study includes all aspects of passenger inflight entertainment and communication, including connectivity, existing connectivity using telephony, software on the IFE system, all audio, video and film content including safety videos and boarding music, in-seat power, games, hardware, and cabling. Print is not included.