COFFEE, TEA OR INFLIGHT GAMBLING? BA TAKES TO MULTIMEDIA SKIES

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LONDON-On the flight of the future, airline passengers will gamble, fax, shop and play videogames as advertisers bombard them with multimedia sales messages and promotions.

The ability to fly the interactive skies will be added this year, but it will take much longer for inflight interactivity to take wing with advertisers.

British Airways is readying a September interactive test that will lead, if successful, to a $150 million-$250 million investment in a fully interactive fleet.

The payback for BA initially will be fees from passengers using the service, for which the airline expects to charge $4.50 and $7.50 per activity, depending on demand. BA will offer pay-per-view movies and sports programming and telecommunications services such as phone, fax and modem lines as well as interactive activities such as catalogue shopping for products that can be picked up at the airport and games, including backgammon, videogames and gambling.

One interested advertiser is Hertz Rent-A-Car. "They're developing the technology before involving us further," said Ian Wheeler, Hertz relationship marketing manager. "We are in discussions with British Airways but haven't quite clarified our position yet."

Other airlines, too, are testing the waters before signing advertisers. Rival Virgin Atlantic is starting its first interactive plane on a London-Hong Kong route, and Singapore Airlines is rolling out an interactive inflight entertainment system in November.

Although early, the potential is there for ad revenues. "We're moving into a situation where airlines are beginning to realize they own a very valuable distribution situation [for advertisers]," said Michael Perkins, president-North America of Spafax Airline Network, an inflight multimedia company based both here and in New York. "It's an opportunity for products not only to advertise but to drive that message to a sale."

BA, for example, is already marketing multimedia inflight opportunities, and last month made a presentation in New York for U.K. and U.S. agency media buyers. Michael Batt, BA's marketing director, said he intends to make similar presentations periodically around the world.

Inflight interactivity will go beyond the sales messages currently available through inflight magazines or airline cabin video screens, enabling passengers to actually place orders through their seat-back monitors and make payments using the credit card swipe at each seat.

Particularly suited to use airline interactivity as an advertising medium, said Mr. Rowse, are hotel and car rental businesses.

In its test, BA will assess how long passengers use the service, how many use it and how attentive they are, information crucial to any ad sale. But one possible drawback could be the inflight equivalent of channel surfing. "[Earlier] passengers were a captive audience-they had to watch whatever was shown on the screen, especially in economy," said Emma Horrill, a BA marketing executive. "With interactivity, you choose for yourself."

Of necessity, the airlines are focusing on testing the technology and seeking the right mix of entertainment to keep passengers happy and lure them into spending money.

The BA progam is much more ambitious than previous tests. Seats in all three cabin classes will be equipped with monitors, phones and credit card swipes. Of the 24 channels planned, about six will be free.

Air Canada, for example, did a much simpler multimedia promotion in its business class with Mercedes Benz in December. In addition to inflight magazine ads, tent cards on meal trays offered a free three-month trial of a Mercedes car. The response rate was 18%, said Mr. Perkins, adding that 4% is usually considered an excellent response rate for direct response.

In other in-flight activities, last month Air Canada began selling two disposable Kodak cameras, one for $11 and another for $12, as well as Kodak film for $3 on seven routes, earning Air Canada and Spafax a percentage of the sales revenue in exchange for free inflight media. Attendants announce the cameras are for sale and conduct the transaction on board. To generate excitement, a drawing for a free camera is held on each flight.

"These concepts are being tested now as a precursor to when everything can be done [interactively] on the video screen," Mr. Perkins said.

Virgin Atlantic, with a reputation for being an entertainment-oriented airline, now has a 16-channel, entertainment system, including a Nintendo video game channel, on its London-Hong Kong route. Six planes will go interactive by midyear, according to Steve Ridgeway, Virgin's marketing director.

"At this moment we've got the most advanced interactive entertainment system," Mr. Ridgeway said. "We'll have gambling by midsummer, a shopping channel, and after Easter a survey channel for customers to provide feedback, make comments, and offer ideas." So far, however, Virgin hasn't approached any advertisers.

Singapore Airlines's program starting in November on one plane and planned for the entire 747 fleet eventually will include inflight shopping, telecommunications, pay per view and games channels.

There are no plans by any of the airlines to advertise or promote their interactive services at this point, and for good reason: There aren't enough interactive planes.

BA, for one, wants to "avoid disappointing passengers who heard about all the [interactive] services then get on and it's not that type of aircraft," Ms. Horrill said. But she added there are plans for a major communications program if the entire fleet goes interactive.

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