Why Airlines Are Investing Heavily In Retrofits In 2021

When COVID-19 took over the world in March 2020, it sent airlines reeling.

Travel restrictions and outright bans shuttered borders, and mandatory quarantines hit the industry when it was booming. According to data from IATA, the global airline industry made $838 billion in 2019. It made half that in 2020.

After the initial shock wore off, airlines soon began rethinking their fleet planning, says Hernan Abbes, Panasonic Avionics’ Vice President of Global Sales. Aircraft purchases planned for 2021 got pushed off three or four years—and suddenly, airlines realized they’d be stuck with their current planes for a long while.

That’s where retrofits come in, says Abbes: “It’s a global trend now, and it’s because of COVID.”

The Big Retrofit Trends

With hundreds of grounded planes, airlines are looking to revitalize the cabins of their existing fleets.

Abbes is noticing a couple of key trends here. “Premium economy is a big one,” he says. Business travel is declining while leisure travel is growing, he explains. That means they are looking to remove some of those biz-class seats and replace them with premium economy.

Narrow-body aircraft are another popular target for retrofits. Originally conceived as a perfect short-haul, no-frills regional jet, many airlines chose to forgo installing embedded IFE systems on these aircraft; the cost-to-flight duration ratio didn’t support the investment. But now narrow-bodies are now flying longer than ever, with some of them even crossing the Atlantic Ocean. There’s just one problem: passengers really don’t like long flights without seatback screens or in-seat power.

“Now that narrow-bodies are on the upswing, they’re looking at bringing IFE back,” says Abbes. The move is driven by two big factors, he adds: “Not only do passengers demand it, but your competition has it.”

IFE: To Embed Or Not to Embed?

Airlines considering retrofits of aircraft without seatback screens—or those considering getting rid of their embedded in-flight entertainment (IFE)—may be in the process of comparing conventional IFE to bring your own device (BYOD)-driven entertainment options.

Abbes says connectivity—the main driver of BYOD entertainment—is another popular retrofit request. But whether your airline would benefit from a purely BYOD solution or a hybrid BYOD-seatback scenario, depends entirely on your business model.

An important consideration to keep in mind is whether you’ll be using those aircraft at any point on routes longer than four or five hours. Although COVID-19 has made people wary of touching surfaces, passengers still have a breaking point when it comes to in-flight boredom. “After five hours, you need IFE,” says Abbes. A happy medium is using a remote functionality built into the airline app that allows passengers to control the seatback screen with their personal devices.

“On Singapore, your device syncs with the seat and your phone becomes a touchless IFE remote,” says Abbes. See our Welcome Aboard collection for other types of touchless and less-touch solutions.

Meanwhile, if airlines are considering boosting their premium economy footprint, they should be mindful of the industry standard for that seat class includes 12 or 13-inch seatback monitors—a notable size differential from the classic 10-inch screen in economy.

Airlines that decide to forgo seatback screens altogether may want to consider adding a free or tiered-rate Wi-Fi service capable of handling streaming to their retrofits, along with in-seat power and Type A and C USB outlets. Many narrow-body aircraft are missing these critical elements, and if airlines intend to continue using their existing planes for another several years, letting passengers plug in is a smart bet.

A Portal to Better Ancillaries

For airlines, the best but most underused feature of IFE systems—especially seatback screens, given their position directly in front of captive audiences—is their potential to drive ancillaries.

In the post-pandemic recovery, we’ll see airlines use their retrofits to experiment with new monetization strategies in efforts to recoup lost profits as well as lay a more sustainable path forward. Abbes predicts airlines will try out premium paid content and instant video, class-differentiated content, shopping and hospitality services, gaming, and other avenues to generate ancillary revenues.

What’s An Airline to Do?

Retrofitting is happening in every region of the globe.

It started off slow around halfway through 2020 when airlines realized the pandemic would be wearing on much longer than anticipated. “Then all of a sudden, retrofits started coming in from everywhere,” says Abbes.

If you’re wondering if a retrofit is right for you, it probably is. In still-uncertain times, investing in your existing fleet in some capacity—whether it’s a connectivity upgrade or a full cabin refresh—is one of the smartest bets you can make. Let us know how we can help you.