The real luxury is getting there quickly

Daniel Solon of aviation consultancy Avmark

An hour's online time on Connexion, for example, will cost the passenger around $20 (�14), which will be shared between the airline and the service provider.

According to the most optimistic estimates, the in-flight internet services market could be worth as much as $50bn over the next ten years.

Margins under pressure

Airlines would love to get a piece of that action: aviation statistics conflict hugely, but most point to a sharp slowdown in profits from traditional economy-class passengers, as tourists increasingly opt for budget airlines such as Ireland's Ryanair and Go, owned by British Airways (BA).

Pierre Jeanniot, director general of the International Air Transport Association (IATA), told an industry conference earlier this year that, despite a brisk 6.8% annual increase in passenger traffic in 2001, profits per passenger were on course to fall for the second year in succession.

The overall net profit of IATA members, which include almost all major airlines, could be just $1.5bn this year, down from $2.4bn in 1999, Jeanniot said.

Coming soon in business class

Adding perks like internet access will help airlines cash in on the more lucrative business-travel and first-class market, analysts say.

"The average business-class passenger is worth ten times as much as one in economy class, so the airlines plainly need to cater for them" says Morten Herholdt, an analyst at Barclays Stockbrokers in London.

A host of airlines are getting in on the act:

• Virgin Atlantic is examining plans to launch a business-class-only airline, Jetset, to serve a number of transatlantic routes.

• BA, which introduced the first flat beds last year, is spending �200m to install them throughout its network.

• Concorde, which looked certain to be scrapped after its crash in Paris last July, is being reintroduced this year jointly by BA and Air France.

• Most major carriers are investing heavily in business-class facilities, including expanding passenger space, and bolting on perks such as effortless check-in, in-flight massage and chauffeur-driven cars to and from the airport.

Time is money

However, many companies are reining in the corporate expense accounts that pay for almost every business-class and first-class seat: a recent survey by the Association of Corporate Travel Executives found that budgets are being trimmed by around 6-10% this year.

But some observers reckon that careful business-class investments will pay off.

Busy executives may not care much about chauffeurs and vintage champagne, says Daniel Solon, of aviation consultancy Avmark, but they are still willing to pay high fares in order to save time by working or sleeping on the move.

"The real luxury is getting there quickly on something like Concorde," says Mr Solon. "And what really counts is sleep."

Quality in-flight time

And while the airline business is increasingly polarised between cheap-and-cheerful airlines on the one hand, and the luxury flat beds of BA Club Class on the other, the once-massive middle market is in danger of being squeezed out of existence.

"Economy class passengers pay plenty of money for their tickets, but are wedged in, fed bad food and herded around like cattle," says Mr Solon. "They are the real victims."