2

Size of the in flight Wifi market?

Hello everybody,

I recently encountered this market sizing, which looks quite complicated to estimate.

Any recommendation would be appreciated!

Hello everybody,

I recently encountered this market sizing, which looks quite complicated to estimate.

Any recommendation would be appreciated!

2 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer

Hi,
you do that like any other market sizing question. The idea is to find the number of potential customers for the whole market.

One way to do it is to look at the number of flights per year. First of all, it would be good to understand if the question is related to a specific country or not as you need to start with a population number. Then you could think of how many flights does an average person take per year. Let's say an average person take 2 flights per year. Then you would need to estimate how many people on a plane carry devices with WiFi-connectivity. Let's say 80 per cent of passengers (alternatively, break that down again; to estimate the number of WiFi devices use the replacement concept (every three years a person buys a new smartphone on average etc.)).

The market would have a size of:
Percentage of WiFi Users * Population * Number of flights per person, for the US that would be 0.8*320M * 2 = 512M

In the end, you may propose some options of how to actually charge customers for this service. Of course, you can always add some more features to your estimates.

There you go!
Best,
Daniel

Hi,
you do that like any other market sizing question. The idea is to find the number of potential customers for the whole market.

One way to do it is to look at the number of flights per year. First of all, it would be good to understand if the question is related to a specific country or not as you need to start with a population number. Then you could think of how many flights does an average person take per year. Let's say an average person take 2 flights per year. Then you would need to estimate how many people on a plane carry devices with WiFi-connectivity. Let's say 80 per cent of passengers (alternatively, break that down again; to estimate the number of WiFi devices use the replacement concept (every three years a person buys a new smartphone on average etc.)).

The market would have a size of:
Percentage of WiFi Users * Population * Number of flights per person, for the US that would be 0.8*320M * 2 = 512M

In the end, you may propose some options of how to actually charge customers for this service. Of course, you can always add some more features to your estimates.

There you go!
Best,
Daniel

Book a coaching with Axel

100% Recommendation Rate

27 Meetings

302 Q&A Upvotes

USD 179 / Coaching

To answer this correctly you need to account for both to supply of in flight WiFi services and demand.

i would propose a solution as follows:

volume:

Number of aircraft globally x % of aircraft that are WiFi enabled (should be quite low %) x aircraft capacity in passengers x load factor % x number of flights per day x uptake of in flight WiFi % x 365 days in a year

price:

price per hour x average number of hours used

A solution based on flights per person could also be used and may be easier but needs to account for how many flights actually offer the service.

To answer this correctly you need to account for both to supply of in flight WiFi services and demand.

i would propose a solution as follows:

volume:

Number of aircraft globally x % of aircraft that are WiFi enabled (should be quite low %) x aircraft capacity in passengers x load factor % x number of flights per day x uptake of in flight WiFi % x 365 days in a year

price:

price per hour x average number of hours used

A solution based on flights per person could also be used and may be easier but needs to account for how many flights actually offer the service.

(edited)

Related BootCamp article(s)

Important Facts

It's essential to know some key figures regarding geographies, population, economies for your case interviews. We summarized them for you here.

1 Q&A

Market Sizing

Market Sizing Questions are used to test your quantitative & reasoning skills. Learn more on how interviewers evaluate your given answer!

2 Q&As

Related case(s)

Oliver Wyman case: Full Electrons Ahead

Solved 78.3k times
Oliver Wyman case: Full Electrons Ahead Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise them on how to adjust the product offering.
4.6 5 5613
| Rating: (4.6 / 5.0)

Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case

Bain Case: Old Winery

Solved 51.6k times
Bain Case: Old Winery You have inherited the “Old Winery” from your grandfather, a winery which has been family owned for five generations and can be dated back to the 16th century. Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in the conventional way, i.e. they are not organically farmed and certified. The vine stocks are in a good condition regarding age and care. Overall, only ¼ of the harvest is made into wine by the winery itself; the rest is sold. Your grandfather never wanted to change the image of the winery and left the managerial and administrative task to a young and energetic wine-maker. Due to the not so well-known brand , the demand for the “Old Winery” wine is currently rather low. You do not intent to run the winery operatively, given your limited knowledge of wine making, but find the idea of owning a winery exciting. Your plan is to give the winery some fresh impetus.
4.4 5 1343
| Rating: (4.4 / 5.0)

You have inherited the “Old Winery” from your grandfather, a winery which has been family owned for five generations and can be dated back to the 16th century. Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in the conventional way, i.e. ... Open whole case

Roland Berger Case: Onlinestar

Solved 34.4k times
Roland Berger Case: Onlinestar Onlinestar, an online retailer of furniture and garden products (core business), has grown significantly in recent years as a result of an expansion of its product portfolio. The company mainly imports goods from Chinese manufacturers but also operates its own production of cat lavatories (special business) in Eastern Europe. The company sells its goods via Amazon and ebay, and recently via an online shop on its website. Despite this development, the financial ratios have deteriorated in recent years. In particular, gross profit margin decreased significantly. Combined with a significant increase in shipping costs, this led to a negative result for the first time in the recently ended fiscal year and a resulting strained financial situation. Against the background of expected stagnating sales for the current financial year, short-term action is required. The board of Onlinestar asks you for an analysis of the reasons for the negative result as well as a derived recommendation for action. As a consultant, you should bring in your knowledge in online trading and develop solutions. In addition, the management board would like to receive a sales and gross profit plan from you for the current financial year.
4.3 5 726
| Rating: (4.3 / 5.0)

Onlinestar, an online retailer of furniture and garden products (core business), has grown significantly in recent years as a result of an expansion of its product portfolio. The company mainly imports goods from Chinese manufacturers but also operates its own production of cat lavatories (special b ... Open whole case

TKMC Case: Elevators

Solved 16.5k times
TKMC Case: Elevators Your customer is the market leader in the North American elevator service business. This is divided into the areas of elevator construction, elevator modernization and service. The customer has a particularly strong branch network in medium-sized cities and would now like to expand its business in bigger city centers. His next target is Manhattan and he wonders how big the potential is.
4.2 5 1244
| Rating: (4.2 / 5.0)

Your customer is the market leader in the North American elevator service business. This is divided into the areas of elevator construction, elevator modernization and service. The customer has a particularly strong branch network in medium-sized cities and would now like to expand its business in ... Open whole case

DB MC Case: Einstieg in das internationale Fernbusgeschäft

Solved 4.9k times
DB MC Case: Einstieg in das internationale Fernbusgeschäft Für Unternehmen ergeben sich durch die Digitalisierung neue Chancen und Risiken. Neue Märkte mit großem Potenzial können erschlossen werden – gleichzeitig erhöhen Wettbewerber den Konkurrenzdruck. KMUs, Start-ups und Konzerne bringen unterschiedliche Kompetenzen und finanzielle Möglichkeiten mit. Erst vor wenigen Jahren ist ein Start-up mit Know-how im Online-Vertrieb nach der Änderung des Personenbeförderungsgesetzes in den deutschen Fernbusmarkt eingetreten, welches schnell ein großes Netzwerk an Subunternehmen aufgebaut und damit große Marktanteile gewonnen hat. Dies hatte erheblichen Einfluss auf das Kerngeschäft der Deutschen Bahn. Mit dem Ziel Synergien zu nutzen und die Bedürfnisse des Kunden ganzheitlich zu erfüllen, konzentriert sich die Deutsche Bahn nicht allein auf ihre bisherigen Geschäftsmodelle, sondern kooperiert mit anderen „Mobility-Unternehmen“. Von Ihrem Kunden aus dem Topmanagement wurden Sie als Consultant von DB Management Consulting beauftragt, einen Business Case zu bewerten und zu prüfen, ob die Deutsche Bahn ihr bisheriges Geschäftsmodell öffnen sollte, um durch die Kooperation mit einem etablierten mittelständischen Busunternehmen in das internationale Fernbusgeschäft einzusteigen. Die Deutsche Bahn bietet bereits wenige internationale Verbindungen der Marke „IC Bus“ an, jedoch hat die DB-Tochter in der Vergangenheit große Marktanteile verloren. Im Rahmen der Einführung soll dem Kunden zunächst die Verbindung Hamburg – Lund (Schweden) ohne Zwischenstopp in 7 Stunden angeboten werden. Die Distanz zwischen Lund und Hamburg liegt bei 385 km. Bei erfolgreichem Start ist ein schnelles Roll-out auf andere internationale sowie deutschlandweite Strecken geplant. Im Fokus stehen die Erhöhung des Marktanteils, die Bewertung der Nachfrage des Kunden, der Kosten und Erlöse sowie das prognostizierbare Wachstum im Fernbusmarkt.
4.3 5 109
| Rating: (4.3 / 5.0)

Für Unternehmen ergeben sich durch die Digitalisierung neue Chancen und Risiken. Neue Märkte mit großem Potenzial können erschlossen werden – gleichzeitig erhöhen Wettbewerber den Konkurrenzdruck. KMUs, Start-ups und Konzerne bringen unterschiedliche Kompetenzen und finanzielle Möglichkeiten mit. Er ... Open whole case