Airlines looking to bank on in-flight WiFi in China

Want China Times, Staff Reporter 2015-02-21

A user connects to the internet with a tablet on a China Southern Airlines
aircraft, June 2014. (Photo/CNS)

China Eastern Airline's in-flight WiFi package for passengers flying from Shanghai to Beijing has spread through China's other major airlines, including Air China, China Southern Airlines and Hainan Airlines, reports online news portal Yicai.

China's civil airlines on average transport close to 400 million passengers a year, and together have clocked nearly one billion hours of flight time and 2.5 flight hours per person on average. The majority of China's passengers are now frequent flyers, and as such demand better services. Whichever airline can eliminate the problem of information isolation during flight stands to gain a host of these clients.

To offer in-flight WiFi services, airlines need to rewire their aircraft, which costs somewhere in the hundreds of thousands for just one plane, said Zhang Chi, deputy director of China Eastern Airlines transformation division.

According to market researcher In-Stat, in 2010, about 8% of international airlines had equipped WiFi services. In 2015, the service is expected to generate a total income of US$1.5 billion a year. It is no surprise that airlines are throwing their money at installing WiFi services, said one unnamed executive of China Southern Airlines.

As of 2014, more than 1,800 aircraft outside of China had installed WiFi services. Business models for the new service include charging passengers an access fee, charging advertisers or information providers, or sharing income.

Cooperating with e-commerce firms is another option to reel in bored passengers looking to blow some money on in-flight shopping, according to the report.

In the near-term, turning a profit will not be easy for domestic airlines because the service is still in the early stage of development in China and there are still policy restrictions as well as technological issues needing resolution, said several industry insiders.

China still forbids passengers to turn on their mobile phones in-flight, restricting electronics to personal computers when the aircraft is above 3,000 meters in altitude.

Nonetheless, China's in-flight WiFi service will be a gold mine, said experts.

China's internet industry is globally competitive, a fact that should help divert losses from lack of development. The country's civil aviation industry transported 350 million passengers in 2013 and traffic is rising more than 10% a year, according to a 2014 report by the Shanghai-based National Business Daily.

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