Jetstar finally has iPads for in-flight entertainment after a two-year development that shook up the IFE industry

With Australia’s Jetstar now rolling out iPads as portable in-flight entertainment devices, the industry partners are looking back at the two-year development and acknowledging the time, but saying the project shows the goal was viable and that the industry now has an attractive new solution after the perceived stumbling blocks of Apple’s licensing agreement and revenue model were overcome.

“I don’t think we ever crossed anything where we thought this was insurmountable and we would never get there,” said Michael Reilly, the chief operating officer for Stellar Inflight, who provided content for the Jetstar iPad. “It did take longer than we hoped but we always believed we would get there. And we did.”

Jetstar began renting out iPads on 8 November across its Australia and New Zealand short-haul network, with deployment on long-haul flights to commence next month. The low-cost carrier has ordered an initial batch of 3,000 units—it has a commercial-in-confidence agreement with Apple, but does not pay more than retail price—and is initially stocking 24 iPads on its 180-seat A320s and 30 on its 214-seat A321s for rent on flights longer than two hours for A$10-15.

That enables Jetstar to rent iPads out to 14% of passengers. On long-haul A330 flights, 122 iPads are available for the 265 economy seats (the 38 business class seats receive a complimentary rental).

The iPads are distributed after takeoff in exchange for photo ID and collected prior to landing. A patented case designed by Bluebox Avionics, another of the partners involved in the project, contains an RFID tag if an iPad does go astray. The case also contains an external battery that doubles the iPad’s 10 hour life.

via YouTube by Winglets747

Content includes movies, TV shows, games, books, and magazines. Early window content from four studios, with more in the pipeline, is offered. Up to 56 iPads can be synced in about 45 minutes, with a current monthly refresh of content. If wireless syncing becomes available, more regular content—like newspapers—can be offered. Also available to other customers are food and beverage and duty free ordering.

Raj Dhamu, a technical consultant with Bluebox, says airlines—including OpenSkies and Iceland Express—are interested or lining up. “There’s many more coming onboard as well. It’s very busy.”

For the product’s full roll out, what it means for the iOS versus Android debate, and what stretched development into two years, see the full article below.

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Jetstar Airways, Bluebox Avionics and Stellar Inflight have achieved what industry skeptics said was unviable or simply unachievable: turning Apple’s iPad tablet into a portable in-flight entertainment solution offering early window movies, TV shows, games, books, and magazines.

Jetstar, the wholly-owned low-cost subsidiary of Qantas, is now promoting the 3,000 iPads it is renting for as little as AUD10, following its 8 November inaugural deployment on an Auckland-Melbourne service. The suppliers are looking at what content they can support next—including daily newspapers and food and beverage and duty free ordering—and expand their customer base to airlines previously waiting to see if the project would persevere and overcome the two criteria detractors said would ground the project: Apple’s licensing agreement and revenue model.

The word on everyone’s lips is finally. Jetstar commenced a trial in June 2010 but then went silent on the solution’s rollout as the development programme encountered unexpected hurdles as the industry sought to understand the new product and new approach of turning a high-profile off-the-shelf device from one of the world’s leading but reticent technology companies into a portable IFE unit. The development stretched way beyond aviation, having involved all of the major Hollywood studios, Apple, and likely late Apple co-founder Steve Jobs.

“I don’t think we ever crossed anything where we thought this was insurmountable and we would never get there,” said Michael Reilly, the chief operating officer for Stellar Inflight, one of the industry partners in the project. “It did take longer than we hoped but we always believed we would get there. And we did.”

After nearly two years in development the IFEC industry has emerged in a landscape no longer dominated by traditional heavyweights Panasonic and Thales as fleeting upstarts enter with shiny new devices asking the question “iOS or Android?” These themes have played out over the past year, but with the iPad now shown to work, it brings new substance to all of the discourse. The debate about the IFEC industry’s future has only just begun.

Magical and revolutionary for airlines too

Jetstar took to the skies in 2004 as a low-cost carrier and had used portable devices, including devices from Airvod, before deciding in 2009 to explore a new IFE solution. Apple’s unveiling of the iPad on 27 January 2010 as a “magical and revolutionary” device captured the attention of Jetstar group CEO Bruce Buchanan, and from there the iPad was to be Jetstar’s IFE solution.

A tender selection resulted in London-based Bluebox designing the software and supporting accessories with Sydney-based Stellar providing content. (Bluebox is partly-owned by content supplier Phantom Media but can work with other content providers.) The project turnaround was fast enough for Jetstar to announce on 1 June a trial commencing later that month and running into July involving approximately two hundred iPads on two aircraft: a narrowbody A320 and a widebody A330.

The announcement and trial came as momentum for the iPad was in full swing, with a US release of the product in April and a global release in late May. Apple had not only under-estimated consumer demand—half a million units were sold in the first week—but had not considered enterprise demand, not just for IFE but for restaurant menus and a host of other applications.

Apple had always been a consumer company—reflected in the end-user, not enterprise, agreements in its products—but the iPad was suddenly forcing it into new markets that demanded a fast response. Apple’s response to the enterprise market was one of embrace but measured caution. Jetstar conducted its trial without objection from Apple. The iPad as IFE never had, and never had the risk of having, its software illegally modified, or “jailbroken”.

Getting Hollywood onboard

Hollywood studios were hesitant to be the first to license their content to Jetstar, Bluebox, and Stellar. Of particular concern was the so-called holy grail of IFE: early window content, films that are not yet released on home video. As Hollywood studios increasingly make more revenue from home sales, preserving those sales and reducing the risk of pirated material is crucial. The iPad was a new medium and its untested security protocols to prevent content theft initially drew hesitation from some studios.

But here the complaint detractors lodge against the iPad works in its favour. The iPad, it was said, was too difficult to work with since its locked-down software necessitated working and striking a deal with esoteric Apple. The open software of Android tablets, the argument goes, makes them ideal to load content onto. But just as easily as content can be loaded onto Androids, it can be loaded off unscrupulously. Making content difficult to put on the iPad makes it as difficult to steal.

The studios were reassured but had one last requirement: Jetstar and partners had to have the consent of Apple for them to use the iPad as IFE; Apple’s iTunes was increasingly becoming a prime distribution source and the studios did not want to bite the hand feeding them. Apple’s position, intentionally not forthcoming, meant there was no statement on Cupertino letterhead Jetstar and parties could use to placate studios, adding time as the parties worked to communicate between Apple and the studios.

Perseverance paid off and one studio signed on with a few others quickly following, all with early window content. While stamina helped, observers say, beneficial were the relationships Bluebox and Stellar had with Hollywood. The studios knew and trusted them and had confidence content would be safe in a new product. Relationships and the power they can leverage should not to be underestimated as the IFEC market quickly swells with new entrants.

An earthquake and iOS 5

Jetstar and suppliers were ready to put the infrastructure in place for a fleet-wide rollout in time for Christmas 2010. But as rumours swelled of an impending release of a new iPad model in January, the rollout was quietly pushed back. All seemed to be set on 2 March 2011 when the iPad 2 was unveiled with a faster processor, the A5, which helped improve the speed of the Bluebox application. The iPad 2 was also lighter, reducing aircraft weight.

But the earthquake and tsunami that hit Japan nine days later stopped production of the solid state drives used for memory in the iPad, affecting the supply chain for nearly three months. During this time Apple limited iPad 2 sales to consumers, and not bulk enterprise orders as Jetstar’s would have been.

As normalcy returned to production, Apple was finalising its latest version of the iPad’s software, iOS 5, which for the first time would incorporate an enterprise license, giving Apple and Jetstar a definitive arrangement on the public record, clearing the way for rollout.

The other challenge skeptics said made the iPad unsuitable was Apple’s revenue model based on the company deriving profits post-purchase as consumers downloaded applications and other content, which Apple receives a share of. Apple expressed no interest in collecting a share of IFE content revenue—it was too complex, amongst other reasons—and that potentially left it with a revenue stream loss. But Jetstar and Apple struck an agreement that sees Jetstar not pay more than the retail price. Jetstar Australia and New Zealand CEO David Hall declined to comment at all, saying the agreement was commercial-in-confidence.

A lesser challenge from skeptics was how the iPad as IFE would work with Apple’s iOS software. Once the Bluebox app is launched on an iPad, it locks out the user from using the iPad’s basic functions, which could potentially lead to stealing media content or loading their own content. But locking out the user and taking control of the iPad without permission from Apple is in breach of the user agreement. Apple would typically not approve iOS applications that created a lockout, causing some to wrongfully speculate Jetstar and its partners would jailbreak the iPad in order to load the software and content. While Jetstar and its partners did not boost encouragement by staying mum on the development, they were limited to what they could publicly acknowledge.

On Jetstar, 3,000 iPads and counting

Jetstar is now rolling out 3,000 iPad 2s across its Australian and New Zealand bases home to 62 aircraft, primarily A320s but also A321s and A330s. A follow-up order will be placed for when the iPad IFE is extended to the Singapore-based Jetstar Asia operation, which operates 17 aircraft, almost all A320s but also some A330s.

At the initial rollout, iPads will be stocked on the A320s and A321s in an approximately 1:7 ratio to passengers that will allow 14% of passengers to rent an iPad. A greater proportion of passengers will be able to rent iPads on longer range A330s. Uptake on all aircraft and sectors will be monitored and adjusted according to demand. Jetstar’s 180-seat A320s will have 24 iPads for hire while 214-seat A321s will have 30 iPads for hire. The aircraft perform flights typically under five hours and the iPads will be available on flights longer than two hours for between A$10-15.

Starting next month Jetstar’s 268-seat A330s, which fly upwards of ten hours to Hawaii, Japan, and Southeast Asia, will carry 160 iPads available for rent from $12 if pre-booked online, or from $15 if rented onboard. An iPad will be reserved for complimentary rental to the 38 business class seats on Jetstar’s A330s, leaving 122 iPads for the 265 economy seats, about a 1:2 ratio.

The iPad case allows them to be propped up on a traytable, but Jetstar is in the process of retrofitting some of its fleet with B/E Aerospace’s Pinnacle seat, which incorporates a bracket the iPad can be mounted to at eye-level. The retrofit is under way but Hall said Jetstar was awaiting certification of the bracket. While the seats are expensive infrastructure, they are lighter and thinner than Jetstar’s previous seats, some of which did not recline, irking passengers.

Flight attendants are tasked with renting and collecting the iPads, and Raj Dhamu, a technical consultant with Bluebox who is managing Jetstar’s rollout, says crew training is brief. Cabin crew only need to input the flight number, which in some instances determines content availability.

“It’s a simple as that. They know how to use the iPad. Most customers do,” Dhamu said. “I’m not just saying that. It generally does not go wrong. It just works.”

Bluebox has designed and patented a special case that holds an external battery, extending the iPad’s built-in ten hour battery. Battery recharging infrastructure has been set up in eight ports across Australia and New Zealand where aircraft remain overnight, allowing ground company Broadlex to swap batteries during extended layovers, eliminating the need for in-flight recharging on narrowbody aircraft that typically do not have in-seat power. The iPads remain onboard the aircraft in galley carts except for when content has to be refreshed, which will initially occur monthly. Then the iPads are off-loaded and brought to a secure section of Broadlex where they are synced with new content.

Jetstar is using the 64GB iPad, the largest version on the market. About 50GB is available for content, and for November Jetstar is offering 11 movies (four studios have made early window content available, with more in the pipeline), 25 television series, 12 games (as all media is run through Bluebox’s application, iOS games are not automatically compatible), 5 magazines from Australian media company ACP, and 50 children’s books, which about maxes out the iPad’s capacity. A single Macbook or Mac mini can sync upwards of 48-56 iPads in about 45 minutes. A fleet-wide content refresh can occur over two days.

Now being explored is wireless syncing, critical if Jetstar is to support daily or weekly newspapers. “Wireless loading and streaming of content is coming to IFE in a fairly rapid way. It’s inevitable, but I don’t think we’re willing to put a timeframe on it…but let’s say the ball is rolling,” Stellar’s Reilly said. Due to the technology and network capabilities still developing, he expects initial wireless loading would just be for content requiring frequent refreshes, although the software would cope with only some content being refreshed.

“The platform is capable of isolating content you would consider evergreen versus today—something that stays on for a month or just a day. You can isolate those different types of content and then look at different content loading mechanisms,” Reilly said.

Hollywood may throw its support behind wireless syncing. “It was believed Hollywood would never approve wireless loading of content, especially early window. The way technology is moving now, it’s swinging around to the other school of thought that wireless can be more secure, having less SD cards and USB drives floating around,” Reilly said. “The lesser amount of fingerprints on the content, the better.”

As for wireless connectivity in-flight, there is none on Jetstar’s iPads as the airline does not have a connectivity solution, partly due to the region lagging in options, but other airlines could request connectivity.

Security

Some immediately lampooned the iPad project over security concerns: how to prevent high-profile and expensive devices from being stolen. Jetstar was introduced to the project’s risks early on when a small number—the company won’t say how many—of iPads were stolen from a non-airport facility.

The Jetstar iPad is encased in Bluebox’s custom holder, preventing it from being separated. An RFID tag, with about a 20 metre range, is inside the case, but these are seen as extra measures. The iPads will be distributed after takeoff in exchange for a passenger’s identification card, and then returned to galley carts before landing. Outside the aircraft, the location where iPads receive content refreshing is subject to strict security: no personal belongings are permitted inside.

The benefits

While the risks for the iPad as IFE are higher than for an embedded solution or low-profile portable device, there are also advantages. By Jetstar’s estimate the iPad solution weighs one-third of a traditional system, reducing weight, as well as maintenance costs. A portable solution also brings greater flexibility to fleet planning; like most LCCs, Jetstar’s fleet is predominately leased, and the portable solution means Jetstar does not have to worry about IFE when aircraft are returned, although Jetstar is increasingly owning more of its aircraft.

Content costs are also driven down as Jetstar is paying for content on the limited number of devices and not a screen at every seat that may go unwatched. The Bluebox software also collects detailed metrics of what programmes are watched, allowing Jetstar and Stellar to adjust content based on passenger response.

There is a gimmick factor in having a high-profile device used as IFE when Jetstar’s competitors, like Tiger Airways and Virgin Australia, presently offer no fleet-wide IFE solution for the future. Even Jetstar parent company Qantas felt the pressure. Qantas will soon trial Lufthansa System’s BoardConnect wireless streaming solution as a possible interim measure for old aircraft lacking IFE and awaiting replacement from elusive 787s.

And then, of course, is ancillary revenue. IPad rental fees will help Jetstar achieve its current target of $32 of ancillary revenue per passenger, making it a leader in the category.

For Jetstar and suppliers, no iRest

The iPad IFE project was always meant to be a fully-fledged IFE solution and not a one-off to prove naysayers wrong, and so the companies are now looking to expand the platform. Jetstar will eventually add its Singapore-based operations, more content mediums like daily newspapers, and monitor passenger take-up to see if more iPads are needed. Like with aircraft development, the launch customer gets hit with delays, but then enjoys a period of exclusivity.

Jetstar is not ruling out iPad deployment on its second batch of 787s. The first 787s to enter the Qantas Group will be -8s in early 2013 to Jetstar, where they are needed for economical long-haul expansion. As 787-9s a few years later roll out from Everett and Charleston, they will replace Jetstar’s 787-8s, which will be transferred to Qantas mainline. This shuffle requires Jetstar’s initial 787s to be compatible with Qantas specifications, which means having Panasonic’s embedded IFE solution. Jetstar can have its own spec on 787-9s, including iPads, but the rapidly shifting technology and consumer trends may mean Jetstar needs to look not at supplying devices but offering wireless IFE.

More immediate is expanding the solution to other airlines, like British Airways’ OpenSkies, which conducted a trial, Iceland Express, who currently self-manages its iPad IFE, as well as airlines waiting to see the final rollout. Adapting the software for other airlines involves simple graphic user interface changes. “There’s many more coming onboard as well. It’s very busy,” Dhamu said.

Some have questioned how Jetstar can claim the title of world first, which Hall, referred to the project as, since iPads are or have been in use by other airlines. The OpenSkies trial was only on first generation iPads and with no early window content, done to ensure Jetstar would be the first with those features. Iceland Express has offered iPads as IFE, but almost only with local Icelandic content, skirting the need for the involving arrangement Jetstar worked out with Apple and Hollywood.

Hall later qualified himself to say, “It’s a world-first in terms of the tailored technology.”

As the iPad development stretched, airlines began to look for alternatives. Before Jetstar announced its trial Malaysia Airlines was also exploring using the iPad as IFE, especially on some medium-haul routes operated by aircraft without an embedded system, but has since ruled out the iPad, saying it is too complicated. American Airlines in September signed up to deploy 6,000 Samsung Galaxy tablets across its premium cabins. Apple’s litigation against Samsung means Samsung tablets are unavailable in some markets, including Australia.

With the iPad finally out, the industry debate is no longer one of the seemingly happy-go-lucky Android pitted against an introverted iOS tablet.

“Some view the delay of this project as it’s too difficult to work with Apple, and Android would be the magic bullet. Android, even though it’s open, causes its own set of challenges. The studios think it’s too open,” Reilly said. He agrees with Dhamu that an Android solution is inevitable, especially with Panasonic and Thales developing Android-based systems. Both Bluebox and Stellar will support Androids, with Bluebox working on an Android solution.

“We’re working on developing it for the Android platform but the [difficult] thing is getting approval from Hollywood studios. That should be happening soon,” Dhamu said. Currently no Android product is known to have secured Hollywood content.

Given the open software of Android tablets, more companies may support Androids if Hollywood gives them their blessing. Apple and Samsung products have near identical sticker prices, but judging from the legacy of the iPod and iPhone, the iPad will trump in consumer appeal.

For Apple’s magical and revolutionary device being used as IFE, the magic within the industry has worn off. But the revolution is just starting.