- 27 Apr 2022
- Chris Kjelgaard
- Avionics - BizAv
While different elements of cabin electronics hold different importance for different operators, what determines genuine ‘value’ in a cabin upgrade? Dave Higdon explores...Back to Articles
Is it reasonable for owners and operators to expect to see an investment in upgrading their cabin electronics to be repaid at the time of resale? Could an upgrade enhance value in other ways? The answer very much depends, ultimately hanging on the relationship between the electronics and the end-users.
The aircraft cabin-upgrades market value is set to grow by $3.96bn, progressing at a CAGR of 7.41% between 2021 and 2026, per the latest report by Technavio, a leading market research company with global coverage. And with a steady stream of new and improved cabin electronics options available, such upgrades are increasingly popular among business aircraft operators and owners.
It’s up to the operator to select the new system, and hopefully install one which will change the jet's value in today’s market for the better. Indeed, assessing the value and worth of a proposed upgrade can help operators avoid buying less than they need, while ensuring they don't buy what they don't need.
Aircraft owners are never short of options in the cabin electronics upgrade industry, whether the reason is to increase resale value, or because the existing systems are becoming obsolete, worn, or are simply not to their tastes.
From adding Wi-Fi, to modernizing entertainment systems, to improving the lighting and air quality within the cabin, modifications come at a variety of costs and, depending on extent of work, take varying amounts of time (though if executed when the aircraft is grounded for scheduled maintenance, this needn’t cut into routine operations).
What Motivates the Upgrade?
While modifications come at many different price points, factory-approved/authorized facilities will draw on the best cabin electronic products available, from Wi-Fi systems to Blu-ray players and Cabin Management Systems.
Ultimately, aircraft owners upgrade their cabin electronics for many reasons, and defining these will help establish the overall value of the upgrade.
As an example, if an aircraft owner wishes to make their aircraft available for charter and the cabin doesn’t offer the latest in Wi-Fi technology or a sophisticated entertainment system, the owner may find that, over a period of time, the revenue they lose out on if they don’t upgrade outweighs the cost of the upgrade. That’s because for many charter customers today, a lack of in-flight connectivity/entertainment is a non-negotiable element of their flying experience. They’d always hire an aircraft offering that functionality.
Preserving and increasing resale value is often the primary motivation for owners, however. Just as with selling a home, first impressions drive many sales.
An aircraft might have the latest avionics, but the way the lighting illuminates the seats and cabinetry and gives an inviting aura is as important as whether passengers can easily use a laptop or iPod, or enjoy a meal/hot drink with a galley or coffee station. These elements can all combine to seal the deal.
As a word of caution, though: While many options exist for owners or companies wishing to personalize their cabins via the electronics they install (reflecting their own tastes, purposes, or corporate image), if resale is the eventual goal, refrain from making selections that could put buyers off.
So what’s hot in today’s cabin electronics market, and likely to add value to an upgrade? Speed certainly thrills – not in terms of Mach numbers, but network speeds. The factors influencing internet speed include the type of service chosen, whether terrestrial (Air-to-Ground), satellite-based, or both; the size and base-speed of the network; how users connect; and how many users are connected in a given time.
Finding a Baseline to Gauge Costs
The goal here is to establish a baseline value. If you haven't already come to a conclusion as to what will add value to the cabin electronics offerings on your jet, either for you or another/future user, consider consulting with a specialist in the field.
You’ll find a range of MRO shops willing to help, who specialize in your make/model, and can share what’s hot and what’s not with other owners of similar aircraft. This will give insights on how to enhance a cabin for resale, positioning your jet to offer a little bit more than the competition, or what’s in vogue with charter customers.
Moreover, they’ll help you work through an assortment of questions about your own mission needs and requirements – the ultimate goal being value in the cabin electronics installed for the end- user the passenger(s) in the back. The monetary value comes after that operational value has been optimized.
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