Market Information

Below are some of the key statistics from the industry, each showing the importance and benefits of airlines and rail operators introducing passenger technology solutions into their service.
  • Ancillary Revenue

    • In 2017, airlines were estimated to have earned $82.2bn globally from ancillaries - around 10.6% of global airline revenues.

    • High quality in-flight WiFi connectivity has been seen to deliver a 23% premium over the average passenger due to their expenditure on ancillary revenue, with airlines forecast to generate $0.9 billion in 2018 in broadband-enabled ancillary revenue.

    • Big Data analysis can lift ancillary revenue by 5-10% by helping airlines to generate deeper insights into what customers want and can afford, facilitating better price differentiation and upselling strategies.
  • Artificial Intelligence (AI), Machine Learning (ML) & Robotics

    • Around 14% of airlines now use AI-powered chatbots. Early adopters include AeroMexico, Finnair, Singapore Airlines, Icelandair, Lufthansa and KLM.

    • 52% of airlines plan to implement AI initiatives into their customer service operations over the next five years, and that number is expected to rise to 68% by 2020.
  • Augmented Reality (AR) & Virtual Reality (VR)

    • VR revenues will reach $7.17bn by the end of the year, rising to $75bn by 2021, with VR for enterprise, such as construction and travel, expected to take a considerable market share.
  • Big Data

    • By the year 2020, with so many devices connected to the Internet of Things (IoT), it is estimated that the average person will generate 1.5GB worth of data per day.

    • In a recent survey conducted by Accenture, 61% of respondents from within the aviation industry highlighted Big Data analytics as their top priority relative to other priorities within their company. The remaining 49% listed it as within their top 3 or top 5 priorities.

    • This same survey revealed that 40% of respondents from within the rail industry viewed Big Data analytics as their company's top priority. 95% of respondents listed it as within their top 3 or top 5 priorities.

    • Big Data analysis can lift ancillary revenue by 5-10% by helping airlines to generate deeper insights into what customers want and can afford, facilitating better price differentiation and upselling strategies.

    • The 2018 IATA Global Passenger Survey results revealed that 66.8% of women and 72.4% of men felt comfortable sharing their personal information in order to speed things up at the airport.
  • Biometrics

    • 63% of airports and 43% of airlines are likely to launch biometric identity management solutions before 2020.

    • Investment in passenger self-service, cyber security and cloud services is said to be at the top of the agenda for CIOs at both airlines and airports.

    • The 2018 IATA Global Passenger Survey results revealed that 60.7% of women and 65.4% of men named biometric identification as their preferred travelling token.
  • Connectivity

    • With nearly every passenger using a smart device as an essential travel tool, the demand for more tech-enabled services from airlines and airports is on the rise.

    • 61% of respondents to the 2017 SITA passenger survey indicated that they would use or like to use their mobile devices to access information about their flight, during their flight.

    • Over 23,000 commercial aircraft will offer in-flight connectivity (IFC) to their passengers by 2027, up from 7,400 aircraft in 2017, whilst NSR's latest Aeronautical Satcom Markets report forecasts IFC will generate nearly US$37 billion by the end of that year.

    • Currently 4.1 billion passengers fly annually, but only 45% of responding airlines operate or take delivery of connected aircraft. That percentage rises to 66% by the end of 2019. By 2035, connected aircraft with high quality, secure in-flight WiFi are expected to be ubiquitous.

    • High quality in-flight WiFi connectivity has been seen to deliver a 23% premium over the average passenger due to their expenditure on ancillary revenue, with airlines forecast to generate $0.9 billion in 2018 in broadband-enabled ancillary revenue.

    • Connecting onboard commercial aircraft systems to the internet, as well as making operations more efficient and customer-friendly, could save airlines up to $15 billion annually.
  • Cryptocurrency, E-Commerce & Payment Solutions

    • 4 out of 10 travel companies have trouble managing multiple payment service providers (PSPs), with a 5.4% share of global travel sales going towards paying PSPs. This equates to approximately $74.5bn spent by global travel operators upon PSPs per annum.

    • 95% of travel companies plan to offer new fintech innovations such as contactless payments, cryptocurrency and instant payment solutions to their customers in the next three years.

    • The primary reasons cited as drivers for payment innovation in the same study were customers' suggestions (91.0%), loss of customers (83.3%), employees' suggestions (69.2%), internal operational stress (62.8%) and competitors' innovation (47.4%).

    • A projected 28 billion mPOS transactions are expected to be made in 2018, rising to 87 billion annually by 2023.

    • 89% of travel companies believe enlisting third party help with payments innovation will increase their revenues due to increased customer choice.
  • Cybersecurity

    • Cyber criminals are increasingly targeting the travel & tourism markets, with 3.9 billion malicious login attempts being carried out in 2017 against websites belonging to airlines, rail operators, cruise lines, hotels, online travel, automotive rental and other transport organisations.

    • The 2018 IATA Global Passenger Survey results revealed that 66.8% of women and 72.4% of men felt comfortable sharing their personal information in order to speed things up at the airport.

    • According to SITA, passenger self-service, cyber security and cloud services are at the top of the agenda for CIOs at both airlines and airports. With regards to cyber security initiatives specifically, 95% of airlines and 96% of airports are planning major investment in this area before 2020.
  • Internet of Things (IoT)

    • By the year 2020, with the number of devices connected to the Internet of Things (IoT) predicted to reach 28 billion, it is estimated that the average person will generate 1.5GB worth of data per day.

    • Whilst two thirds of airline leaders believe that the IoT offers clear benefits right now, and 86% expect to see identifiable benefits within 3 years, only 37% of airlines have begun to explore and implement IoT improvements as a way to confront rising costs.

    • Investment in passenger self-service, cyber security and cloud services is said to be at the top of the agenda for CIOs at both airlines and airports.

    • Connecting onboard commercial aircraft systems to the internet, as well as making operations more efficient and customer-friendly, could save airlines up to $15 billion annually.
  • Mobile & Apps

    • Digital travel sales are estimated to have topped $189.6bn in 2017, 40% of which was purchased via mobile.

    • One in three travellers now book via mobile, and it's predicted that 70% of all online travel agency bookings will be made on a mobile by 2020, as global smartphone ownership rises by 50% to 5.7bn.

    • The 2018 IATA Global Passenger Survey results revealed that 85% of travellers would like to receive flight notifications via their smart device.

    • According to a survey conducted by Google and PhocusWright, 45% of UK smartphone users and 48% of US smartphone users are comfortable researching, booking, and planning their entire trip to a new travel destination using only a mobile device.

    • 61% of respondents to the 2017 SITA passenger survey indicated that they would use or like to use their mobile devices to access information about their flight, during their flight.

    • Today, the vast majority of airlines provide check-in (73%), boarding (70%) and flight status notifications (68%) via mobile, and by 2020 more than 97% plan to do so. A key area of growth will be providing real-time flight updates over social media, which will jump from 31% of airlines doing so to 92% in the next three years.

    • Providing a seamless experience is key to airlines. In total, 94% rate streamlining services into a single app as a priority, with 58% rating this as a high priority, whilst 67% of passengers in the 2017 SITA passenger survey stated a preference for using their mobile devices to acquire this information.

    • The latest survey by SITA shows that 92% of airlines either have or are planning major programs to provide passenger services through social-media integrated apps.

    • The total number of sessions in travel apps increased by 55% between 2015 and 2017 in the US.

    • When 63 frequent flyers were asked to name the single most basic expectation that caused them the highest amount of frustration when absent, the fourth highest rated (~12%) grievance was a lack of app functionality.
  • Passenger Trends

    • The global travel industry's gross booking income reached $1.6 trillion in 2017, making it one of the fastest growing markets in the world.

    • Air passenger demand is increasing globally (3.8%) and is forecast to double to 7.8 billion per annum by 2036.

    • In 2017, at any one time there was 9,728 planes carrying 1,270,406 people in the sky.

    • 61% of respondents to the 2017 SITA passenger survey indicated that they would use or like to use their mobile devices to access information about their flight, during their flight.

    • Currently 4.1 billion passengers fly annually, but only 45% of responding airlines operate or take delivery of connected aircraft. That percentage rises to 66% by the end of 2019. By 2035, connected aircraft with high quality, secure in-flight WiFi are expected to be ubiquitous.

    • Millennials purchase travel approximately four times a year. That means that for most of the year, they are in a state of seeking inspiration or planning their next trip.

    • Whilst 78% of leisure travellers don't know which airline they will use when considering a trip, 27% of passengers would choose to pay more to fly with an airline they believe offers a better passenger experience.

    • The latest global passenger survey from the International Air Transport Association (IATA) showed that just 52% of passengers in Europe are satisfied with their travel experience.

    • Digital travel spending will top €704bn globally by 2020.

    • More than 85% of travel consumers say that personalization has affected their travel purchase decisions.
  • WiFi

    • Over 23,000 commercial aircraft will offer in-flight connectivity (IFC) to their passengers by 2027, up from 7,400 aircraft in 2017, whilst NSR's latest Aeronautical Satcom Markets report forecasts IFC will generate nearly US$37 billion by the end of that year.

    • Currently 4.1 billion passengers fly annually, but only 45% of responding airlines operate or take delivery of connected aircraft. That percentage rises to 66% by the end of 2019. By 2035, connected aircraft with high quality, secure in-flight WiFi are expected to be ubiquitous.

    • High quality in-flight WiFi connectivity has been seen to deliver a 23% premium over the average passenger due to their expenditure on ancillary revenue, with airlines forecast to generate $0.9 billion in 2018 in broadband-enabled ancillary revenue.

  • Sources:

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    Barraclough, C. 2018. Travel Industry To Enter New Era Of Payment Innovation To Improve Customer Experience. [ONLINE] Available at https://procurementandsupply.com/2018/08/travel-industry-to-enter-new-era-of-payment-innovation-to-improve-customer-experience. [Accessed 1 August 2018].

    Becker, G., Bouwer, J., John, D. & Toutaoui, J. 2018. Walk before you fly — capturing the digital opportunity in airlines. [ONLINE] Available at https://www.mckinsey.com/industries/travel-transport-and-logistics/our-insights/walk-before-you-fly-capturing-the-digital-opportunity-in-airlines. [Accessed 4 July 2018].

    Boutin, N., Jhunjhunwala, P., Guggenheim, J., Vicq, D. & Karimi, I. 2016. It's High Time Airlines Got Personal. [ONLINE] Available at https://www.bcg.com/en-ma/publications/2016/marketing-sales-technology-digital-its-high-times-airlines-got-personal.aspx. [Accessed 17 July 2018].

    Coren, B. 2018. Talking Chatbots. [ONLINE] Available at: http://www.onboardhospitality.com/chatbots/. [Accessed 6 June 2018].

    Fernandez, K. 2018. Pack your Jetpack: The future of travel is here. [ONLINE] Available at: http://www.blackbook.net.in/pack-your-jetpack-the-future-of-travel-is-here/. [Accessed 6 June 2018].

    Grous, A. 2017. LSE Sky High Economics. Chapter One: Quantifying the commercial opportunities of passenger connectivity for the global airline industry

    Hodgson, C. & Waldmeir, P. 2018. How airlines aim to use big data to boost profits. [ONLINE] Available at: https://www.ft.com/content/f3a931be-47aa-11e8-8ae9-4b5ddcca99b3. [Accessed 6 June 2018].

    Irvin, C. & Schmid, R. 2018. Deloitte. Traveling at the speed of knowledge | Exploring operation and profit benefits of deploying the Internet of Things

    Marcellin, F. 2018. Airports tap into virtual reality for passenger entertainment. [ONLINE] Available at: https://www.airport-technology.com/features/virtual-reality-passenger-entertainment. [Accessed 4 July 2018].

    McKeay, M. & Fakhreddine, A. 2018. Akamai. State of the Internet / Security: Web Attack

    Morris, G. 2018. 10 years of the App Store: two million apps and counting. [ONLINE] Available at: https://www.tnooz.com/article/mobile-apps-app-store-10. [Accessed 6 July 2018].

    Murphy, N. 2017. Airlines made a record amount from passengers in extra charges last year. [ONLINE] Available at: https://www.ibtimes.co.uk/airlines-made-record-amount-passengers-extra-charges-last-year-1649320. [Accessed 30 July 2018].

    Naumov, M. 2018. How AI is helping airline customer service reps get closer to customers. [ONLINE] Available at: https://www.tnooz.com/article/ai-airlines-customer-service. [Accessed 2 July 2018].

    Nichols, S. 2018. Valour Consultancy. The Future of In-Flight Connectivity - 2018

    Revillon, P. 2018. Euroconsult. Prospects for In-Flight Entertainment & Connectivity

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    Wilson, G. 2017. Experts Have Their Say - The 2018 Mobile Trends That Have Got The Travel Industry Talking. [ONLINE] Available at: http://blog-digital.travelport.com/the-2018-tech-trends-that-have-got-the-travel-industry-talking. [Accessed 6 July 2018].


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