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AirMedia Group Unit Inks Deal to Tap In-Flight Wi-Fi Market

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Beijing AirMedia Tianyi Information Technology Co. Ltd., the subsidiary of AirMedia Group Inc. , recently entered into a contract with China Eastern Airlines Corporation Limited (CEA - Free Report) through the latter’s joint venture with China Eastern Airlines Media Co., Ltd. Per the deal, AirMedia will provide resources to help transform the China Eastern Airlines Corporation business platform into a leading global in-flight entertainment platform.

From January 2018, China Eastern Airlines became one of the first airlines in China allowing passengers to use mobile phones in flight mode while being airborne. The airline expects this move to aid the growth of its air-Wi-Fi services, as 60% domestic travelers and 80% international travelers might opt for the facility according to estimates.

China Eastern Airlines currently holds nearly 70% of China's aero-mobile Internet market. By partnering up with AirMedia, a first-mover in the travel Wi-Fi market, the companies can tap a huge market potential.

According to estimates by British satellites telecommunication company Immarsat, the in-flight wi-fi market is expected to become a billion-dollar revenue generating market by 2020. Estimates by popular airline companies suggest that more and more aircraft will rapidly be equipped with in-flight wi-fi connectivity.

This boom is largely aided by the fact that in-flight wi-fi government regulations have become less stringent in many countries.

However, fitting aircraft with the necessary hardware can create higher operational costs and lead to increased cabin weight, although these initial impediments can be overcome by the immense market potential.

Other players in the market include JCDecaux SA and WPP plc (WPP - Free Report) .

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