To watch a movie you need the storage space on your device. Use this Support Article to check your Storage Space and it also offers tips to free up space:
How to check the storage on your iPhone and iPad - Apple Support
Using Optimized Storage for photos and videos will free up storage space on your device by storing them in the cloud, but to view a picture or watch a movie, it needs to be downloaded to your device first. This will all happen automatically as long as there is space on your device for the file to be downloaded. You cannot download files directly to iCloud and to be able to watch a movie on a plane, the movie will need to be on your device using device storage, assuming you are not paying for internet access on the plane.