The space between…

It seems like everybody and their brother is now talking about how much – if anything – passengers are willing to pay for in-flight Wi-Fi. Scott McCartney in a recent Middle Seat Terminal article said tests show that usage drops off considerably when travellers must pay for in-flight Wi-Fi service.

Daniel Indiviglio of The Atlantic has gone as far as to create some charts to ascertain the shape of the Wi-Fi demand curve, discovering in the process (somewhat obviously) that a lot more people would be willing to use the service if it were cheaper.

The conversation about in-flight Wi-Fi is most active in the United States, where Aircell’s air-to-ground (ATG)-based broadband system is finding itself on more and more domestic aircraft (well over 500 at this point, and counting), and where Row 44 recently announced a deal to bring its Ku-band connectivity offering to Southwest Airlines’ fleet of 550-plus aircraft.

But perhaps the conversation should be less about what passengers will pay for in-flight Internet and more about WHEN passengers will pay. Does it make sense for a carrier to charge anything for in-flight Wi-Fi on a short-hop flight? That is a conversation that is definitely up for debate.

Check out the following chart from LiveTV. It shows that on an average flight of 2.5hr, passengers have a limited window of time to log on to the Internet (because rules prohibit any electronic action under 10,000ft). Let’s call this “the space between” (starting at minute 50 may be a bit of a stretch, though).

LiveTV slide gate-to-gate.JPG

 



Add in the fact that some airports are offering free Wi-Fi – and that many passengers are accessing the Internet through cellular networks via their iPhone and other smartphones as soon as they touch down – and it’s plain to see why airlines might find it difficult to charge for in-flight Wi-Fi on short and even medium-haul routes.

Equally, however, it seems logical that, the longer an aircraft is in the air, the more likely it is that passengers will want to connect. That is, no doubt, one of the reasons why American Airlines first started offering Gogo on its transcontinental flights. 

So what is the way forward for carriers? It’s clear, at least in the USA, that offering in-flight Wi-Fi is becoming the price of doing business even if the promise of massive windfalls of cash do not prove out.

To that end, Aircell appears very well-placed in the marketplace, having secured eight airline customers thus far. Will bandwidth be a problem for Aircell? Row 44 president Gregg Fialcowitz recently went for the jugular, claiming that ATG aircraft connectivity is currently limited “to a layer of 2.2 megabits” per second data rate and that once Aircell’s ATG system becomes widely used, it will run into spectrum limitations and “require more spectrum”. 

All I can say to that is that I’m on Twitter all day long and despite reports, including on this blog, that Aircell could be running into bandwidth limitations – or will in the future – Gogo users right now seem super happy with the service. And I mean SUPER happy.  

So here’s my question – should Aircell stop all these discounts and promotions and start offering Gogo for free on flights under three hours duration – which would further wet passengers’ appetites for the service – but keep the price really strong and steady on long-haul flights?

Would Southwest Airlines – which hasn’t set its Wi-Fi pricing yet – be wise to do the same? Unlike Aircell, Row 44 hands pricing control over to its airline customers (that’s one of the big reasons why Southwest opted for Row 44) so could Southwest really set a precedent with “free Wi-Fi” on short-haul and “pay-for-service Wi-Fi” on long-haul domestic service?

Getting the long-haul rates right is particularly crucial now as international carriers prepare to offer Ku-band connectivity on overseas flights. Expect some announcements about that in the near future.

When that happens the conversation about price could really heat up because suddenly we’ll be dealing with a much broader space between……………….which demands a little Dave Mathews.

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3 Responses to The space between…

  1. Dave September 3, 2009 at 4:27 pm #

    I’d say it might be better to run with live TV (or TV with pre-recorded stuff) over Wi-Fi. With Wi-Fi you’re discriminating against people who don’t have their computers with them. Also consider how without TV how my life, and by extension, everyone else’s is meaningless.

  2. alloycowboy September 3, 2009 at 7:46 pm #

    The price of the wifi connection should be included in the price of the airline ticket. It should be one of the perks of flying Southwest over its competitors. Allowing only certain passengers access becomes a real logistics headache epically if the passenger paid for the service and it didn’t work. The advantage of burying it in the airline ticket is if the technology craps out then you don’t have to give their money back because it was only a perk. As for live TV why bother? Do I really need to watch more reality TV?

  3. Ludwig von Hapsburg XII "Stinky" September 3, 2009 at 8:51 pm #

    I fly Southwest for the free food, extra legroom, and their schedule from FRA.

    “Stinky”

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