Apple Inc. (NASDAQ:AAPL) has once again pioneered what seems to be the next generation mode of Airplane entertainment and media. This is yet another line of business for the widely diversified portfolio for the world’s most valuable company. Through Bloomberg, it is reported that the company has launched what seems to be a pilot project for the greater goal of replacing airplane TVs with iPads, starting with a Singapore based Airline, Scoot Pte, which is a subsidiary of Singapore Airlines Ltd (SIA)
According to Bloomberg, the exercise helped the airline cut two tonnes of weight thereby increasing the Miles per Gallon efficiency. With the reduced weight, the plane becomes lighter hence reducing on fuel consumption. Business wise, the eradicated weight can be used in place of an income generating commodity, like more cargo.
Analytically, the replacement of the TVs with iPads cut the weight of the planes from the parent company by 7%.
The iPads will be offered to on-board customers, readily loaded with music, movies, videos, television shows and games replacing the former services primarily offered on the TVs. While the business class fliers will borrow the iPads on gratis, economy class members will have to part with Singapore $22 or $17 as rent for the device during their travel.
Momentarily, the iPads will be used in airline’s four Boeing 777s, but there are plans to launch them in the fleet of 14 777s within the next few years, AppleInsider notes. JPMorgan Chase & Co. (NYSE:JPM) transportation research analyst Corrine Ping, believes that this is a smart move by the two companies, as it will make the airplanes lighter hence increasing their efficiency.
However, not everyone sees this as a candid smart move; according to Bloomberg, Timothy Ross, managing director and head of Asia-Pacific transport research at Credit Suisse Group AG (NYSE:CS) in Singapore said, “We view this as initially a defensive measure by Singapore Airlines,” ….in a continued statement, he further mentioned, “Given that margins on those revenues are so much higher than they are on carrying passengers, anything you can do to increase that as a proportion generally augers well for the bottom line,” Ross said
Scoot will be making its first flight to Tianjin, China by end of August, while some two more destinations will follow by close the year, believed to be in Northern China.