Air Transport

Southwest Airlines will use tiered fees to sell in-flight connectivity when the carrier finalizes pricing for Row 44's high-speed Ku-band-based Internet solution, Southwest SVP marketing and revenue management Dave Ridley says.

The low-cost operator, which has been trialling price points on four Boeing 737-700 aircraft, has charged as little as $2 for Internet access via a handheld device on a short-haul flight, to as much as $12 for connectivity via a laptop during a long-haul flight.

Speaking to ATI at the carrier's annual media day on 21 October, Ridley addedthat the airline wouldalso develop a subscription model, where for example, passengers could pay for a certain amount of monthly Wi-Fi access.

The Row 44 launch customer will continue testing Internet pricing through the end of 2009.

Testing has shown a variety of passenger uptake rates since the airline began charging for access this June.

Uptake rates have been between 5% and 20% depending on the flight length, Southwest manager of product development Angela Vargo says. Long- and medium-haul flights have greater usage than short-haul flights. Uptake also depends on the day of the week and time of the day;for example, usage is heavy during business days, she adds.

Passenger awareness of the Wi-Fi offering could impact uptake rates. Ridley notes the airline attempts to notify passengers via e-mail the day before their flight that their aircraft will have connectivity but advance notification is not always an option.

"We are not discouraged by the take rate," he says.

In addition to trialling various price points, Southwest has also surveyed passengers about their in-flight Wi-Fi usage.

"E-mail blows everything out of the water," Vargo says, adding that surfing the Internetis the second most common use.

Reading the news, social networking, instant messaging, checking stock market reports, VPN and travel information are also common uses, she says. A few passengers even check their bank account, Vargo adds.

The airline began testing connectivity in advance of fleet-wide rollout starting in the first quarter next year.It hashas not determined an equipage timeline but Ridley says he anticipates installation will finish in 2011.

Southwest operates 546 aircraft, a mixture of 181 737-300s, 25 737-500s and 340 737-700s, according to Flightglobal's ACAS database. The airline also has orders for 90 more -700s, the database shows.

Dallas-based Southwest is pursuing FAA certification for Wi-Fi installation on its

-500s and -300s as it already has regulatory approval for equipage on its -700s.

The airline is financing its fleet-wide rollout but Vargo declines to discuss Southwest's investment as negotiations with Row 44 are ongoing.