UPDATE: I heard from a trusted source this morning that Southwest Airlines’ fleet plan, which lists all aircraft maintenance planned three months out, calls for a 737-700 to be equipped with Row 44 in January. This would be the fifth Southwest 737 equipped with Row 44.
Consultant Tim Farrar’s latest blog about Row 44 is sure to get tongues wagging this week.
Farrar claims that the business case for Row 44′s Ku-band service “looks even more questionable than we had suspected, and it faces a near term deadline (we understand January 2010) from Southwest to secure $100M+ of funding for its planned fleetwide rollout”.
Key par (but do read the whole thing):
“We have been told that the Southwest-Row44 agreement calls for Southwest to pay Row44 a fee of $0.25 per passenger flown on each equipped aircraft, whether or not they use the service, and Southwest will then mostly likely give the connectivity away for free. With Southwest carrying about 170K passengers per plane per year, that would mean Row44 receiving just over $40K per plane per year (about $22M per year in total once fleetwide installation is complete), which it hopes to supplement with advertising revenue. However, we are doubtful that a dramatic increase could be realized from advertising: for example according to a recent article, in-flight magazines generate an average of about $1M per airline per year in gross advertising revenue, and a large airline such as Southwest would presumably therefore generate in the high single digit millions of dollars from its magazine. Given the lack of technology (and power outlets) required to read the magazine, then even if Southwest gives away the Row44 service for free, usage would be far less than the 80% of passengers that read the in-flight magazine, and we would view it as unlikely that advertising revenue could add more than a few million dollars to Row44′s income.”
Farrar goes on to question the sustainability of large-scale Ku-band passenger deployments in general, and even throws in an unconfirmed (as of 9pm Monday night) nugget about Inmarsat releasing an RFI for one or more Ka-band satellites, “which are likely to be part of its planned roadmap for future government and/or aero services”.
Tim, have you no decency? I was watching Mary Poppins tonight for heavens sakes!