IFEC Profit Margins

In the not too distant past, airlines depended on essentially the same technology for IFEC, as most any movie theater. A film was shot directly onto a screen using a projector. Customers could listen to the film via proprietary headsets or through in-cabin speakers. For many passengers, this was not an ideal situation. For the airline this was not an efficient way to manage IFEC profit margins.

This has changed and changed drastically in a very positive way for all parties involved. The main reason for going to this new system is the same as any reason a business makes changes. To increase profits and satisfy shareholders. It all comes down to weight on the plane.

Managing IFEC profit margins for business jetsWeight is a major issue on flights. Some airlines have removed the seat back screens from their airlines, cutting weight by 1,200 lbs. A lighter plane means less fuel; less fuel means a better profit.

People, however, have not seemed to mind this change. The main reason is the advent of newer and newer technologies. Gone are the bulky, heavy laptops of old (remember that weight issue) requiring lots of storage space.

Tablets, smartphones and the like have changed computing in a way like Bill Gates did with Windows 3.1. Aviation commercial aircraft and aerospace VVIP aircraft alike have needs for great IFEC systems.

 

IFEC Profit Margins Delicate Dance

 

This is a welcome change for airlines, where again, weight is equal to profits. In-flight entertainment has certainly gone through its own growing pains. From silent films to bulky 8mm, grainy machines to DVD’s and projectors. Along the way, passengers have been kept happy and entertained. Not as concerned about delays, waits and unforeseen circumstances that kept a plane grounded for an indeterminate amount of time. Jump forward several years, and now we have streaming video. Movies and more are coming in over wireless and data from cellular providers. For the airline industry, this is an absolute goldmine and recruiting the right people is key.

MOVING AWAY

Gone will be the days of the same film showing for all passengers, young and old. Finding a movie suitable to keep all passengers entertained for a flight can be virtually impossible. Instead, passengers use personal devices to log into the plane’s on-board wi-fi system. Watching personal devices for Netflix, Hulu and YouTube is obviously a preferred method of entertainment over a single, one-size-must-fit-all movie.

POWER OF CHOICE

A customer, or in this case a passenger, who has some degree of choice in a situation is likely to be much happier and willing to accept certain situations and possible additional fees for the trade-off of continued entertainment. Families traveling with young children certainly understand the value and power of a portable DVD or gaming system to entertain, and adults benefit just as much when left in a similar situation. In other words, on a plane, everyone is a child wanting to know, “Are we there yet?”

ON-BOARD SERVERS

The early Internet was certainly filled with its share of mistakes, drops and vicious lag that kept most everyone more annoyed than anything. Companies who provided Internet needed vast storage often kept at temperatures where a jacket or coat would be necessary due to the enormous amounts of heat generated by the systems. Today is a completely different story. Adding a server and the wiring for a completely wireless system in an airplane is almost no different from wiring a new business and networking computers and printers. The chief difference is the use of the Internet for pleasure over business, but one can realistically expect business to be happening as well during flights with free Internet.

ADVERTISING

While many would like to think of the wireless as free, nothing is free. Passengers interested in using the on-board wireless may have to listen to the occasional commercial interruption or pause during their movies or videos, but it is a small price to pay for the absolute convenience this offers. Consider this: many of the YouTube channels that are run by commercial entities often preview their own videos with a brief commercial often about their own product. An airline would do quite well with this content marketing strategy, particularly when they have a captive audience of sorts.

Future of Managing IFEC Profit Margins

 

There is and will be plenty of room to grow from this point with managing IFEC profit margins.  Commercial lines still have to balance their customer needs and wants with shareholder expectations and desires. Wireless connectivity on an airplane, however, is quickly looking like the ideal window seat of the past.

About Craig Hufford

Managing Partner | Retained Executive Search Consultant with 30+ years recruiting senior executives and functional leaders for Aerospace and Aviation in power electronics, motor drives / controls, aircraft electrical power, in-seat IFEC and CMS.

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