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If marketers have their way, airline flights will offer little escape from the advertising overload that fills our earthbound lives. Infomercials on movie screens, promotions on tray tables tops and maps that display passenger routes as well as company logos are just a few of the ideas that marketers hope will fly high with the ailing airline industry.

In the past year, advertisers have been lining up to connect with airline passengers, an appealing demographic of affluent, educated and mobile adults. Whether they're on a business trip or on vacation, these travelers are often in spending mode. And they're trapped for several hours, captive to marketing messages. According to the Los Angeles-based Airline Advertising Bureau (AAB), which sells in-flight entertainment media for most of the major carriers, each month more than 23 million passengers travel on airlines that offer ad-supported in-flight television services.

But there's a hitch: The industry has been reluctant to allow advertisers in. Though some smaller carriers have welcomed the revenue, the major domestic airlines have been wary. For most airlines, leasing space to advertisers means relinquishing territory to other brands, spending money to install new technology and potentially alienating passengers.

However, airlines' opposition to in-flight ads may be weakening, in part due to the slowdown in travel. The Washington, D.C.-based Travel Industry Association reports that revenue-per-mile flown in May was down from the year before by 10 percent on domestic flights and 12 percent on international flights.

Even before the hijackings on Sept. 11, most of the major carriers were in trouble. And though Sept. 11 put several new advertising developments on hold, airlines may be ready to think about new revenue streams again or, at the very least, to try to offset some of the costs of entertainment and amenities. According to the World Airline Entertainment Association (WAEA), a McLean, Va.-based trade organization that negotiates contracts between airlines and suppliers, in 2001 airlines spent $1.9 billion on in-flight entertainment and communications — more than double the $845 million spent in 1995. With trendsetting boutique airlines like Virgin Atlantic and JetBlue moving forward with innovative on-board marketing plans, it may be only a matter of time before the larger carriers follow suit. “About six months ago, nobody would take our phone call, but things are beginning to bounce back,� says John Caldwell, managing director of the AAB. “The airlines would really like for advertising to be more of a revenue source, because there's a lot of costs involved in providing all the in-flight programs and amenities.�

The latest buzzwords in airline marketing are “interactive� and “integrated� — involving Internet service, text messaging, personal video recorders, video-on-demand, video game systems and multimedia cross-promotional campaigns. Virgin Atlantic is expected to offer on-board text messaging by year's end, with sponsorship for the service to be sold to an advertiser next year. Within a year, Virgin hopes to provide full in-flight Internet access, using Matsushita hardware, so that passengers can access the Web on chair-back screens. According to Rob Brooker, a spokesman for the WAEA, in-flight multimedia is the wave of the future. But the real promise, according to industry experts, will be in terms of audience measurement.

“One of the difficulties of selling in-flight advertising has been statistics and results,� says Brooker. “With built-in monitoring systems, advertisers will be able to track who watches what and for how long.� Glenn Latta, executive vice president of LiveTV, an airplane satellite television service, says the firm's equipment uses GPS technology that will enable businesses to show destination-specific advertisements. For example, on a Hawaii-bound flight, a hotel chain could offer a promotion for its Honolulu properties.

Some of the technology is already in place. JetBlue was an innovator in on-board entertainment, offering LiveTV in 2000 with 24 channels of programming. JetBlue currently controls one channel, which includes a GPS-updated map as well as flight and route information. MapQuest sponsors the channel, which also runs in-house promotions for and JetBlue partners like Expedia. Says Tim Claydon, vice president of sales and distribution, JetBlue is working to expand the channel's possibilities. “We expect that down the road, we'll go to a CPM [cost per thousand] model that will allow us to sell a percentage of these advertising screens,� he says.

In June 2002, Denver-based Frontier Airlines became the second domesic carrier with satellite entertainment, announcing plans to offer LiveTV beginning this month. Last year, LiveTV ran still-image advertisements from companies such as Barron's and Club Med; by January 2003, LiveTV expects to offer full-motion video, often with a commercial running simultaneously on all channels.

Another new medium is in-flight Internet access. Although negotiations between the major domestic carriers and Connexion by Boeing, a new service to provide Internet servers for airplanes, were put on hold after Sept. 11, several companies are moving ahead with plans for Internet access. Seattle-based Tenzing Corporation markets software that enables in-flight e-mail and some Internet content via a proxy server on an airplane. However, progress has been sluggish. The connection is slower than a 56k modem, and must be routed at least every 15 minutes, resulting in content more “near time� than real time. And planes must be sidelined when the technology is installed. So far, Cathay Pacific and Varig Airlines have signed on for the Tenzing service.

Innovation is also occurring at the low-tech end of the spectrum. Several companies are hoping airlines will allow advertisers to promote products on the airplanes themselves, specifically on tray tables. Tray tops could carry ads that passengers would see each time they lower their trays. So far, no domestic carriers have signed up. The service is offered by two companies, U.K.-based MHM North America, which launched its SkySell last summer, and Chicago-based In-Transit Communications, which sells a similar product, SkyMedia. “Not only is it a new and much-needed revenue stream, it enables airlines to strengthen relationships with current partners and to find ways to work with new retail partners outside in-flight print media,� says In-Transit and SkyMedia president Nick Pajic.

Ed Gargano, president of MHM North America, admits tray top ads have been a hard sell to the major American airlines. “They jump from ‘Great, another source of revenue,’ to ‘Oh no, another form of advertising. Will customers be turned off?’� Gargano says. “[Airlines] want the money, but they're hesitant if the word ‘advertising’ is connected to it.�

In fact, another company, Kansas City, Mo.-based Advent Airads, spent three years trying to convince airlines to allow ads to be placed on overhead luggage compartments, to no avail. While Delta Airlines sells space on its first-class meal tray cards, tray table ads are “not currently under consideration for media sales,� says Amy Owens, senior account manager of promotional partnerships for Delta. “There's definitely a lot of on-board media opportunities now for advertisers. But it's a constant balance to maintain the value of the service or product for passengers and Delta's own needs, and the revenue that will result from it.�

In the meantime, airlines are taking advantage of less intrusive, promotional opportunities. Delta sells ad space on the plastic covers wrapping magazines distributed on-board. The airline also sells ads on in-flight entertainment guides, snack bags, boarding passes, ticket jackets and e-ticket confirmation itinerary inserts. American Airlines recently began offering ad inserts in its headset packages, and plans to allow companies to make sample CDs or DVDs for the personal video recorder systems distributed to premium-class passengers. Last year, according to the London-based In-flight Management Development Center, advertisers paid approximately $360 million worldwide for placements and promotions with airline media.

Advertisers' eagerness to reach passengers in-flight isn't surprising, given the desirable demographic of frequent fliers, particularly those in first or business class. According to the AAB, air travelers have a median annual income of $93,822, and include about 40 percent professionals, managers, executives and other influential consumers. Shuttle services provide an even more elite audience. On the Delta Shuttle, for instance, more than one-fourth of the passengers earn in excess of $250,000 a year, with the average annual income $181,498.

To reach this demographic, traditional in-flight entertainment has expanded in recent years. Whereas 10 years ago entertainment was essentially a single-film exhibition service, today most airlines offer a broad lineup, with network TV programs and multiple movie choices forming a cable-like system unique to each airline. The quality of delivery has improved as well, with more airplanes equipped with personal chair-back screens.

As a result of these expanding options, the airlines' approach to in-flight media has become more aggressive. American Airlines offers not only a bimonthly in-flight magazine but also a quarterly for first- and business-class travelers, a Latin American quarterly and a children's magazine, sponsored by Coca-Cola. In addition to TV ads, more airlines are selling “video news releases� or infomercials, and full-channel or system sponsorship. In its new Boeing 777 airplanes and in business class, Delta offers exclusive sponsorship of its seven-channel in-seat entertainment system, which can carry 8 to 10 commercials per flight and reach 214,000 passengers on 4,648 flights per month. Telecommunications firm Nextel and personal care retailer L'Occitaine have advertised through this medium.

For Delta, integrated marketing plans are the goal. Sony conducted a campaign for its Vaio brand in which it ran commercials during in-flight television programming, placed an ad in Delta's Sky magazine, used e-mail to reach customers via and provided laptops for the airline's Crown Room Club lounges. Virgin Atlantic, which has created integrated campaigns involving tastings for E. & J. Gallo Winery, also seeks sponsors for individual channels on its in-flight TV system. Because the airline is bombarded by requests, says Lysette Guana, head of media for Virgin, it can afford to be selective. An advertiser's brand has to match Virgin's iconoclastic image, and the passenger experience can't be compromised. Stella Artois, a Belgian beer, sponsors the airline's in-flight movie channel and is stocked on-board. “Stella has a really cool image and demographic, so it's not only a source of revenue, it's a great brand fit,� says Guana. “We're fussy about our advertisers, and turn down a lot of advertising.�

Still, hurdles to such campaigns remain. Most airlines are hamstrung in terms of how much labor they can require from their flight attendants and other crew members. The revenue impact for the airlines is also limited. Industry experts say airline woes won't be solved by such ad campaigns. “The industry is in serious trouble,� says Michael Linenberg, airline analyst for Merrill Lynch. “Airlines lost $6 billion last year, they'll probably lose about $4.5 billion this year and most likely will lose about $1 billion plus next year.�

Sharon McGrath, director of marketing for American Airlines, believes there are limits to such media. “The problem is striking that careful balance between overselling something and doing something that will be of interest and value to the passenger,� she says. “Strategically, airlines and marketers have to find that balance.�


Airline passengers are 507 percent more likely than average to have household incomes of $150,000 or more annually.

18-49 75% 115
25-54 72% 121
35-49 41% 129
College 83% 172
College grad + 53% 268
Post-grad degree 25% 348
$75k+ 59% 272
$100k+ 47% 417
$150k+ 12% 607
Top management 12% 315
Professional/managerial 28% 290
Company size 1,000+ 34% 211
Any Internet access 78% 183
Usage in the past 30 days 70% 417
E-mail usage 63% 272
*An index of 100 is the national average. For example, an index of 315 indicates the inflight TV audience is 215 percent more likely than average to be in the ranks of top management.
Source: Airline Advertisng Bureau, 2001


The in-flight TV audience is 205 percent more likely than the average American to have taken a cruise in the past three years than the overall adult population.

Took an international vacation in past 3 years 68% 479
Participated in 3+ public activities in past year 42% 206
Used credit card for business 37% 260
Used $250+ travelers checks 35% 373
Played golf in past year 21% 195
Took cruise in past 3 years 18% 305
Owns real estate other than primary home 18% 194
*An index index of 100 is the national average. An index of 206 means that airplane travelers are 106 percent more likely than the average American to have participated in 3 or more public activities in the past year.
Source: Airline Advertising Bureau, 2001
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