CONNECTING FLIGHTS;CATHAY, SINGAPORE FLIGHTS SEE INTERACTIVE TAKING OFF;ASIA, EUROPE AIRLINES BRING NEW MARKETING OPTIONS ABOARD

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[Hong Kong] By mid-1996, passengers on two Asian airlines may finally be able to rent a car, book a hotel and reserve a restaurant table from their seats at 20,000 feet.

Cathay Pacific and Singapore Airlines are operating the first interactive inflight entertainment systems, with several European airlines starting trials hard on their heels.

Initially the interactive systems are mostly primitive versions of video-on-demand, with reservations and other services due soon from Cathay and Singapore.

"As interactive technology develops, it would enable people to book hotels and car hire direct from the plane," said Mark Rowse, media development director of Spafax Airline Network, a London inflight media specialist working with Cathay, Singapore and several European airlines on interactive entertainment.

Shangri-La Hotels & Resorts said it is open to inflight interactive advertising opportunities and views airlines as valuable travel partners.

RELATIONSHIPS ARE COMPLEX

Because of the complexity of developing travel partnerships, early advertisers are more likely to be credit card and consumer goods companies than hotel chains and car rental companies, Mr. Rowse said.

Spafax's presentations to advertisers and agencies in Hong Kong and Singapore last month drew a crowd. Mr. Rowse said he expects Singapore Airlines to add three or four advertisers and Cathay Pacific two or three this summer. Currently Singapore Airlines has an ad for the Welsh Development Agency running on an interactive news service and Cathay has sponsorship from 555, a British American Tobacco cigarette brand, for a CD-ROM on city destinations called World Insights.

"We want people to think of bigger advertising opportunities," said Nina Grudzien, Cathay Pacific's manager of inflight entertainment and merchandising. "If advertisers want straight ads, they will buy into video."

Ads on the interactive entertainment systems that are already being dubbed the "Internet of the Sky" could advertise whiskey with tours, contests and games.

In the first month after Cathay Pacific's August interactive entertainment launch, more than 1,000 first- and business-class passengers spent at least 15 minutes browsing through destination information on World Insights. The rest of Cathay's fleet will go interactive in September.

MAKING AN INVESTMENT

Asian and European airlines are most willing to invest upwards of $2 million per plane on these systems. By yearend, Lufthansa plans to have one plane in interactive trials, and Iberia is aiming for about 10, according to Mr. Rowse.

The world's most ambitious interactive entertainment scheme has failed to take off so far.

British Airways planned to start tests in November 1994 for a $170 million interactive project to fit 30,000 individual screens and control panels in its First Class, Club World and World Traveller economy services. But the technology lagged behind BA's state-of-the-art plans, and a three-month test on one plane may get off the ground this spring.

Virgin Atlantic Airways has also delayed its plans for almost two years because of technical obstacles and doubts that manufacturers can deliver on their promises. "We're nervous about the technology," Virgin's product development manager, Chris Brady, said.

No new deadline has been set, but Virgin expects to see a potential interactive service by late 1997, at which time it will consider including interactive advertising.

Singapore Airlines spent $21 million to equip six planes on KrisWorld, a multilingual interactive system, in April 1995, with the rest of the fleet to follow this year.

KrisWorld offers 22 channels of video entertainment, including 14 movie channels, news, sports and comedy. There are also 10 Nintendo games and destination information for 16 cities. Each seat is fitted with a six-inch video screen and a remote control unit.

"KrisWorld is an evolving system which will be introduced in phases," said airline spokeswoman Yeap Yin Ching.

The next step is to add inflight shopping with credit card payment and home delivery and a system to book flights, hotels, car rentals and other services.

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