India is set to allow on-board Wi-Fi services that would enable passengers to make calls and access mails. This would give domestic airlines an additional revenue stream that involves limited capital expenditure.
Aviation secretary RN Choubey had said last week that a decision to allow Wi-Fi on board was expected in the next ten days.
Installing Wi-Fi equipment in an aircraft is a one-time cost that can be recouped in, as early as, a couple of months depending on the demand and pricing, says industry experts and airline officials HT spoke to.
“The estimated cost of installing Wi-Fi equipment, which depends on the service provider, quality, the bandwidth an airline is looking at and the fleet size, is around Rs 30-35 lakh. So, an airline like IndiGo may get a better deal compared to a smaller airline,” said an industry expert, who did not wish to be named.
“The operating cost would depend on the bandwidth and from where you get the internet services from but this cost is negligible considering that you pay Rs 500-1000 for using internet for a month at home,” he explained.
“Assuming that 50 passengers on a flight opt for Wi-Fi and an airline charges Rs 300-an-hour for the service, it will generate revenue of Rs 15,000 per flight. An aircraft, on an average, does six flights-a-day, which makes it Rs 90,000-a-day. One can easily recoup the investment cost in just over a month,” said an airline official.
Around 60 airlines in the world offer Wi-Fi services, and foreign carriers charge around $5-$8 per hour to access internet.
Indian carriers have already begun preparations. “Air India is looking for Wi-Fi on board and we had presentations from a couple of vendors sometime back. A feasibility study is also being conducted,” said an airline official.
“It is a progressive and pro-consumer step to match pace with the changing demands of the air travelers,” said Phee Teik Yeoh, CEO, Vistara. “When the policy is out, we will get into the details to understand the processes involved and evaluate the opportunity.”
“This will be a good move. We want to offer the best services to our passengers,” said Amit Agarwal, CEO, Jet Airways had told HT last week.
“It takes around two days for the Wi-Fi wiring to be done and airlines usually get this done when the aircraft goes for the regular maintenance checks so that there is no impact on the schedule,” said another airline official.
“Once the Wi-Fi system is installed, the supplementary type certification will be done by our team to ensure that no electro-magnetic interference is happening,” said an official of the Directorate General of Civil Aviation.