Asian airlines such as Garuda have not been slow to bring the benefits of in-flight connectivity services to passengers. With Indonesia being one of the top markets for air travel and a major hub in Asia, we find out how the airline is looking to be a leader in bringing these services to passengers in the region.

Garuda is one of Asia’s biggest airlines currently serving 33 domestic and 18 international destinations in Asia, Australia and Europe. In order to stay ahead of the game in Asia, the airline wants to be at the forefront of developments in terms of in-flight connectivity (IFC).

Garuda currently has a total of 110 aircraft. For its in-flight service, the airline has selected Panasonic’s GCS system on its B777s, and new deliveries of A330-200/300s are equipped with OnAir’s Wi-Fi system. Lou D’Alessio, vice president of in-flight services at Garuda Indonesia, says that, as far as Garuda is concerned, there is no question that the very best modern flying experience must include in-flight connectivity.

“In-flight Internet is a trend that we and many business travelers are pleased to see expanding within our region. We actually completed our initial connectivity project at the end of our first five-year plan for IFC which came to an end in 2013,” said D’Alessio. “Now, we are at the next stage to move and expand on it. By the end of the second in-flight entertainment and connectivity (IFEC) five-year plan, we will have state-of-the-art Wi-Fi on all of our widebody B777, A330 Fleet, as well as our single aisle B737NG fleet; so even our 737NGs will all be equipped with in-flight connectivity.”

While the airline has just started offering these services, it still has a long way to go. Indratno Widiarto, manager of in-flight entertainment for Garuda Indonesia admits the airline is not using the full benefit of having connectivity on-board. “Right now, we are providing a way for passengers to get connected. We are in the process of assessing how we can take advantage of the technologies, and not merely providing services to our passengers. But we want to optimize processes for our internal operations,” he says.

Garuda has had a chequered history. After some difficult times in the past, the airline is in the middle of an aggressive five-year expansion program. However, implementing a progressive in-flight connectivity strategy has its challenges, as D’Alessio admits.

“I suppose sometimes what is a challenge for us is collaborating with local providers, as well as GSM players. This can create some initial timeline lapses because of all the regulatory requirements that are necessary. Additionally minimizing down time for installation is key to a successful installation,” he says. “We initiated the start-up of connectivity toward the end of last year with the arrival of our B777 aircraft; this coincided with their entrance into service. We had a temporary agreement with the local telco to offer the service in-flight, we were unable to charge for the service because it hadn’t been approved at that stage by the authorities. That took another three to four weeks, and then that service was made available throughout the B777 fleet.”

Revenue Perspective

Courtesy of Garuda Indonesia

Like a number of airlines, Garuda is searching for the best business model. D’Alessio says the airline does not make very much money from providing the service, but is working on the business model to make it more than just a convenient add-on for passengers.

“Most of the revenue is generated by our partners,” he says. “People in Indonesia are very tech savvy… they want to have the latest gadgets and always want to be connected. Having that available to passengers just brings us up an extra level and enables us to offer something more modern and different from our competitors. At the moment we are evaluating offering connectivity on our CRJ aircraft, which mostly operates within the Archipelago; we will continue to seek ways to bring Wi-Fi services to these aircraft. It is not necessarily about putting a whole Audio and Video on Demand (AVOD) system on board the CRJ, but bringing Wi-Fi services to the CRJ via streaming could definitely be an exciting and valuable service benefit.”

While these services are not making huge amounts of revenue and the company is relying on partnerships to help boost the bottom line, D’Alessio admits the operator now sees these services as a competitive differentiator.

“We anticipate customers will factor this in when choosing an airline. For us, we already see encouraging take-up on particular sectors,” he says. “Initially we weren’t sure and deliberated if this will change the whole in flight experience and in particular to the business passenger. Now the uptake particularly in the business cabin has taken us by surprise. We also want to have a bigger up take in the economy cabin; this will lead to cheaper pricing offers. I would say we have seen take-up rates of these services of around 15 to 20 percent from business class passengers. The more take up we have will enable us to re look at future pricing strategy.”

Satellite Solutions

With a number of satellite operators looking to boost their position in this market, airlines now have a choice of which companies they want to partner with. With a number of high-powered Ka-band satellites coming online, this decision could get tougher for airlines such as Garuda over the next few years. D’Alessio says Garuda is waiting to hear industry evaluation and feedback on Ka-band and then the airline can rate the performance and value-add. Garuda is “quite happy” with the Ku-band service it has right now, particularly on its B777 aircraft, he says.

But D’Alessio says the airline could move to a Ka-band solution in the future. “Airlines are very competitive and we do talk and chat to one another. I suppose we are waiting for that feedback to see what to do next, but Ku-band works well for us,” he says. “If Ka-band proves to work well and it is effective, it will then be definitely something we would closely look at. The question with new technology is, do we jump on the bandwagon straight away or do we wait to see what other’s make of it?”

“Ka-band is clearly very promising in terms of providing in-flight connectivity and more speed of service and applications,” Widiarto adds. “We are yet to see it in-flight. Ka-band has been talked about for about the last five years and we know it will be around soon in the next year or so. But we need to wait and see how this technology progresses.”

With so much new technology coming to this market, it is difficult for airlines such as Garuda to make decisions on when to deploy new technology or stay with its existing suite of services. “The technology is always renewing and updating itself constantly, we are also moving so quickly here. It seems that every six months there is another version on some new technology or another new product on the market,” D’Alessio says. “Sometimes, we ask ourselves ‘should we pause and evaluate, or should we continue with what we now have in place?’ Of course these are necessary strategic decisions that must be made. We always want the latest and the best on offer.”

A lot of work will likely take place over the next 12 months as Garuda looks to bring the benefits of these services to more of its passengers. “Garuda sees this as a very challenging project. We plan to install this across our fleet,” says Widiarto. “Within 12 months, we will see more progressive improvements in the service, so we can make the offer even better to our customers.” VS