Sunday 3 April 2011

Installed IFE...and low ROI


Traditional installed inflight entertainment systems are still seen by many as the main option, but as costs are high and technology is always behind the consumer curve do they really offer a good ROI?

Although in theory traditional IFE and Communications (IFEC) systems installed in the seat back are easy to operate and cost effective, in reality they are anything but.  Likely to be expensive to purchase, the experience in the industry is that they require continuous and expensive engineering support to keep working, and with the additional weight of servers and miles of cabling results in significant extra fuel burn.  This all adds up to huge lifetime costs; most airlines may never achieve a decent return on investment. 

The solution of using COTS devices repurposed for IFEC seems like the most sensible option, combining the latest technology with the ease of operation of an installed system...  The downside is all the integration effort, costs and time still has to happen, as Sally Gethin points out in her recent blog http://gethins-ifec.com/?p=573  

Without an industry step change in seat design, only airlines who can afford to develop their own seat modifications will be able to adopt these solutions and there may be a higher seat cost resulting from the requirement for bespoke seat design.   The market for these products looks to be extremely limited.  I have no doubt that these systems will continue to be "available" and may on the face of it look like a low cost option, however the development costs still need to be recouped and so watch out for the sting in the tail - high after-sales costs.



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