Qingdao Airlines is moving forward with installation of in-flight connectivity on its fleet. Satellite connectivity modem provider Gilat indicated that it is now shipping hardware to fit the rest of the airline’s planes following a successful trial that started last year.
Gilat is most appreciative of the close partnership with the Chinese integrator, and the joint effort of ramping up the airline’s fleet of aircraft with Gilat’s proven aero modem, Taurus.
– Yuan Si, China Country Manager for Gilat
The carrier activated its first aircraft in July 2020, with FTS providing integration services for the Ka-band satellite connection on board. The order was first announced in September 2018, and the companies are now ready to move forward on the project.
Gilat says its Taurus modem shipped to “a leading Chinese system integrator” for installation “on the entire fleet” of an airline in China. Given the initial installation on Qingdao Airlines that is the only likely candidate.
The service is provided by China Satcom, over CS-16 Ka-HTS satellite together with its partner China TDT LINK (contents/service provider to passengers).
Gilat also calls attention to the significant potential market for its IFEC hardware in China, suggesting a market of 3,500 commercial aircraft. This initial implementation is far smaller, however. Qingdao Airlines operates just 28 aircraft today.
This is not the first airline or integrator to trial in-flight connectivity systems in China. But it is the first to proceed with plans for the full deployment. And FTS released some numbers recently describing the company’s successes on the pilot aircraft that could help justify the decision from a business perspective.
A case study on IFC in China
FTS says between 70-80% of passengers logged in to the portal on the test aircraft. And 15.6% of travelers provided responses to a marketing survey in exchange for access to the Internet once on board. That’s nearly 40% of the customers that clicked on the ad in the first place.
On the more general advertising front, FTS says it achieved a 6.91% click-through rate, massively better than the typical numbers realized on common social media platforms.
When it comes to paying for WiFi the passengers tend to prefer time-based offerings rather than application-specific or Megabytes packages. This is and always has been the most simple approach for travelers to understand, though also the most risky for providers given uncertainty of behavior (and data consumption) once connected. They also prefer less expensive offerings, with 84.5% of the packages paid topping out at just under $5 to get online.
It is unclear if any of this is enough to deliver a profitable connectivity solution for all parties involved. But the decision to move forward suggests that from both a bureaucratic/regulatory and a financial perspective there’s some tangible optimism around the Chinese IFC market for the first time in a long while.
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