Mobile gadgets threaten in-flight entertainment

TAIPEI Wed Jul 22, 2009 2:29pm EDT

Customers look over an Apple iTouch at the company's retail store in San Francisco, California April 22, 2009. REUTERS/Robert Galbraith

Customers look over an Apple iTouch at the company's retail store in San Francisco, California April 22, 2009.

Credit: Reuters/Robert Galbraith

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TAIPEI (Reuters) - Airlines around the world now spend millions of dollars annually upgrading their inflight entertainment systems, but iPods and other mobile entertainment gadgets could render all that useless.

Besides bland airline food, one other certainty for most long-haul travelers flying in economy class has always been time passed with movies and games on a minuscule 5-inch screen provided by the airline.

However, with USB ports and a power socket increasingly common even for economy class passengers on carriers such as Singapore Airlines Ltd and Cathay Pacific Airways Ltd, the concept of in-flight entertainment could change.

Adding to the mix are plans by carriers such as Delta Air Lines Inc, which has begun offering an Internet connection on board, allowing passengers to continue tweeting and updating their Facebook status instead of flipping channels on the in-flight entertainment (IFE) system.

Analysts call this content customization, where passengers are no longer limited to an airline's offerings in their in-flight entertainment systems and are able to pick and choose what they want to watch or do on board a flight.

Airlines, already badly hit by weak demand for air travel and volatile jet fuel prices, are likely to welcome the move, as it would allow them to save on costs such as licensing fees to production studios and maintenance fees.

"There're so many reasons for airlines to change the way it works right now," said Peter Harbinson, an analyst at the Center of Asia-Pacific Aviation in Sydney. "The biggest advantage for airlines is the weight of the IFE equipment. Fuel burned, regular engineering checks, and licensing fees to movie studios all add up to a considerable amount of money for airlines."

The growing popularity of low-cost netbook PCs and other mobile entertainment devices such as Apple Inc's iPod and other MP3 players could further hasten IFE's demise, as more and more airline passengers carry these gadgets with them when they travel.

GREATER COST SAVINGS

The biggest draw for airlines, industry watchers say, is that they could save money in tough economic times, while simultaneously disguising the change as a product enhancement.

Passengers engrossed with their laptop PCs and mobile entertainment devices that can be used continuously as a result of the power sockets on every seat could also free up cabin crew.

"I've heard stories about the number of crew on board each flight being cut by airlines after they introduced personal TVs on every seat," said Anthony Prakasam, an aviation consultant.

Low-cost airlines such as Ryanair Holdings PLC and AirAsia Bhd, always eager for a fresh revenue source, could also turn to installing USB ports and power sockets and charging for their use.

The biggest losers from the entire episode could be companies such as Rockwell Collins Inc and Panasonic Corp, which develop and build current in-flight entertainment systems but now look like they might have innovated themselves into obsolescence.

These companies have been on the forefront of encouraging airlines to install power sockets and USB ports onto every seat in the aircraft, but they could have to start looking at diversifying their work if they are to stay ahead, analysts say.

Possibilities include venturing into providing advertisers with an entrance into a space that has long been seen as the last bastion of a commercial-free world, broadcasting ads on large screens to a captive audience. But such a plan could backfire.

Khoa C. Huynh, 24, a self-professed airline geek, said he would want to turn off the in-flight entertainment system even more if he were forced to watch advertisements on board.

"I travel everywhere with my laptop, and being able to use it without having to worry about the battery dying on me is a great plus. I won't say I'll stop watching in-flight movies, but I suppose that could mean less time spent on it."

(Editing by Gerald E. McCormick)

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