E L E C T R O S P H E R E    Issue 1.03 - July 1995

Fleecing the Friendly Skies

By Tom Andrews

Tired of waiting for interactive entertainment to come to your home? Then hop on a plane. Likely as not, there won't be any exciting technology wherever you land - but you might have a great time in the air. The world's airlines are currently investing billions in high-tech goodies to keep restive passengers amused: video on demand, computer games, telephones, fax machines and even electronic gambling. Perhaps they'll make flying fun again. Then again, maybe the expense will just speed up the very thing it is intended to stave off: the airlines' collective descent into bankruptcy.

Once technological backwaters - home of cheap headphones made from hollow plastic tubes - airlines are now charging headlong into the interactive revolution. From computers stashed under every seat, they will soon be offering in-flight services ranging from those you know you wanted more of (films) to the ones you probably never guessed you wanted at all (gambling). You name it, you'll get it. Personal video screens and handsets, once the privilege of the elites in business and first class, will be available to the masses. Want to buy some perfume? Call up the duty-free on screen and swipe your credit card through to pay. While you're waiting for your smell du jour to arrive, watch a film or play chess with someone down the aisle instead. Worried about the office? Leave a trail of phone calls and faxes across every time zone.

To supply these new services, aircraft manufacturers are building increasingly sophisticated electronics into their airliners. All of Boeing's 777s, for instance, are being fitted with a state-of-the-art Cabin Management System, which creates an electronic "backbone" for any and all of the interactive systems that will be fitted - with filters to eliminate power surges and workstations to monitor faults even as they also automate the cabin-crew's tasks.

Airline PR departments have gone into overdrive as a new, virulent strain of optimism spreads throughout the industry. BA's group managing director, Bob Ayling bullishly predicts: "we're going to have problems getting passengers off the aircraft at the end of the journey."

In this heady atmosphere of creativity and optimism, a new breed of entertainment guru has appeared. Lee Iacocca, former Chrysler chairman, is probably the most notable. He decided to devote his fortune and future to promoting in-flight entertainment after he came across the rather mystical concept of "compression of time" at a health spa. He was impressed by a hypnotist who gave the impression of droning on for less time than she actually did. "Now I'm not suggesting we hypnotise people," he says. "But there is no question in my mind that gaming [the airlines' preferred euphemism for gambling] is soothing enough to make a three-hour flight seem like a one-hour flight. And that's just ducky with most flyers."

Until, of course, flyers lose all their holiday money en route to their resorts. But most airline executives are careful to stress customer service considerations, rather than financial ones. "It's not about money. As far as Singapore Airlines is concerned revenue is secondary. This is a service to passengers - an entertainment package rather than a revenue package," says Lim Yeow Khee, the airline's manager of in-flight entertainment. Considering his airline is spending over $2.5 million dollars per aircraft on new entertainment systems, this statement sets new standards for corporate altruism. British Airways is the exception. It has dedicated £80 million to putting interactive in-flight services on its aircraft. Mark Hassell, BA's manager for passenger entertainment and communications, admits: "We're in it for the money."

Please return to your seats

The bottom line of in-flight entertainment is that once the passengers' seat belts are firmly fastened they become a captive market, ripe for plundering. And plundered they will be - through sales of duty-free goods, enticements to gamble and tightly targeted advertising.

Duty-free is already a nice little earner, and the chances are that, by making it easier and more fun, the new technology will encourage fliers to spend more than they presently do. In-flight gambling is trickier. Its strongest advocate is Mr Iacocca who argues that it could be a huge money-maker. But nobody is completely comfortable with the notion of gambling. Eager for profits they may be, but no airline really wants to see passengers losing their holiday money on the flight over - if only because of the PR implications. And passengers don't seem too keen on gambling either. Last year BA received a flood of complaints in response to its announcement that it might introduce gambling on a few flights. Nor do cabin attendants want to add "croupier" to their list of duties, as US airlines found out last year when the attendants campaigned successfully for the US government to ban in-flight gaming on flights to and from the States.

Besides, there is probably enough money in advertising and sponsorship to satisfy even the most jaded airline executive. BA estimates that about 90 per cent of passengers use a personal video screen, when provided, for over two hours. That's a captive audience - and one that will be watched as well as watching.

The airlines know from the ticketing computers exactly who is sitting in each seat. Each time Ms Jones in 14B interacts with her screen, it can be recorded. All the information from all those transactions will be quietly swooshed into a central data bank for use by the airline. "There is a huge value associated with that ad-space [on a plane]," explains Michael O'Brien, senior marketing manager at GEC-Marconi In-flight Systems. "You've got a large, captivated, focused audience. The on-board system will be able to record both fault data and user data. With a relational database, you can tell who did what, when and how long for. The guys on Madison Avenue can tell precisely how well their money's being spent." Gambling seems almost like a public service by comparison.

Of course it won't stop there. Another concept being studied is that of cross-promotion. Take, for example, a movie like The Lion King. Given the right promotion, you could order the T-shirt, the mug, the soundtrack - you name it - from your seat, to be delivered to your star-struck kids before you land.

Turbulent times

For the airlines themselves, investments in interactive entertainment are a gamble of epic proportions. According to the International Air Transport Association (IATA), the airlines lost a combined total of $15.6 billion from 1990 to 1993. That's more money than they made in their entire history before that. Last year saw an upturn though - a collective profit of about $1 billion. However, on a turnover of about $107 billion that's peanuts. And now they want to throw all of it - and more - at an unproven technology?

IATA's head of marketing, Tim Goodyear, admits he is "concerned" about the technology's impact on the overall wellbeing of the industry. "If every airline introduces gizmos, they won't be doing anything except maintaining their market share," he argues. "And even if every airline had the most wonderful gizmos in the world, would it persuade people to fly who wouldn't otherwise?"

IATA would rather the airlines devoted their money to more useful - and proven -equipment. It wants to introduce a satellite navigation system that would allow any aircraft anywhere in the world to find its position to within 15 metres. "You could safely double the capacity of any given airspace... With air traffic doubling every ten years, that's going to be terribly important in the next century." The only thing is, it will cost the world's fleet over $2.6 billion to equip itself with this system dubbed Future Air Navigation (FAN). And that money is, er... going elsewhere.

Like on the hidden costs of interactive entertainment. The equipment itself weighs a ton. Actually, more than a ton. Gene Zipp, Vice President and General Manager of Avtech Corporation [which manufactures airborne fax machines], has calculated that "entertainment systems add, at a rough guess, 3,000 to 4,000 pounds additional weight - that's the equivalent of about 20 passengers." His conclusion? "The jury's still out on whether it'll be worth it."

Then there's the small question of whether the stuff actually works. Sceptics point to the Northwest Airlines Hughes-Avicom fiasco. Northwest was the first airline to install an interactive system - with considerable hoopla. It didn't work. Although the PR department talks in terms of percentage failure rates, they actually ended up with a lot of frustrated and disappointed passengers. They closed down the systems and are said to be ironing out the bugs for a new version.

Wary of similar failures, other suppliers have indulged in elaborate testing methods. But they're running into countless problems - from weight limits all the way through to heat emissions. GEC-Marconi is one of the leaders in the field, and O'Brien explains that half the problems are caused by the need to reinvent the concept of in-flight entertainment. "Before, you basically had a repackaged consumer product. Now it's completely different - it's a complete system in which each seat is a node on a computer network running computer services."

The seats will have the equivalent of 386 computers with 4MB of RAM and, depending on the system, will use a network based on groups of seats (nodes) and "head-end zones", all connected to a digital backbone governed by a file server with data storage in increments of two gigabytes. Control panels will monitor failures in the system and automate many standard cabin crew tasks, freeing the attendants to deal with in-flight entertainment queries. Of the 1.8 million lines of code which make up the in-flight systems in one of Boeing's new 777s, about half a million are devoted to interactive entertainment and cabin management. The potential problems are obvious.

Suppose 400 people suddenly decide they want to watch True Lies? That's one hell of a bottleneck. And more problematic still are so-called "power harmonics" - that is, fluctuations in power. A basic CD-player draws about 10 watts in power. Multiply that by 400 seats, add all the other online gizmos and you're talking about a serious power drain on the aircraft. Did I mention that fluctuations in power drain can interfere with aircraft flight and navigational systems?

But none of these potential pitfalls is going to stop the airlines from rushing to install the new technology - nor from dreaming up better technology to come. Perhaps, in a few years, seat-back virtual-reality goggles will replace the seat-back screen. (Sony Trans Com is already developing VR systems for airplanes.) Fly-by-wire planes like the 777 will be just more nodes on the vast planetary communications network, linked by satellite to... everywhere. Put the two technologies together and, executives speculate, tomorrow's passengers may pass the time in the air by pretending they are somewhere else altogether - in a virtual meeting perhaps, or on a virtual vacation.

But this begs a question. If interactive technology can bring the experience of being anywhere to wherever you are, then why would tomorrow's passengers bother to travel at all?

Tom Andrews is a journalist presently moving from Hong Kong to Seattle.