Well played Continental. Well played!

Continental LTV.jpg

I’m finally seated in front of my computer, after a quick trip to Washington DC where I attended the annual Aerospace Industries Association (AIA) luncheon yesterday.

At the event, I asked the trade group’s head honcho Marion Blakey if there is any real hope that FAA reauthorization legislation will be passed before the next FAA funding extension runs out at the end of March (Like a broken record, I believe I’ve asked variations of the same question three years in a row, ahem.)

Blakey was pretty frank, saying the first quarter “feels ambitious given the number of extensions we’ve had”. Yet, the former FAA administrator believes “there has got to be action on this point”.

I am particularly passionate about this piece of legislation because – horror – it contains wording from Representative DeFazio’s tremendously misguided Hang-Up Act, which seeks to ban in-flight mobile phone calls and VoIP, but will, by default, serve to keep GSM/GPRS data services off US planes indefinitely. How would it do that, RWG?

Because, if Hang-Up Act legislation passes, the Federal Communications Commission (FCC) will have ZERO reason to issue a notice of proposed rulemaking on in-flight cell phones simply for data. Insiders say the agency won’t touch the issue with a stick!

Also, the fact is that voice helps to underpin the revenue model for this technology (yes, those calls are expensive), so it’s reasonable to believe that most US carriers wouldn’t see the financial incentive to invest in this technology only to offer a text/email-only offering.

I believe Inmarsat’s head of aeronautical marketing Lars Ringertz says it best when he says: “From a global perspective it is difficult to understand the sometimes quite emotional debate that is taking place in the US regarding whether to allow the use of cell phones or not. The real life experience of commercially operating aircraft equipped with cell phone solutions for quite some time now have proven beyond any doubt that fears of air rage is unfounded.

“It is important to recognize that a ban will most certainly also prevent the use of Blackberries, PDAs, text messaging and other “discrete” modes of communication which is using the same [underlying] technology. To introduce legislation rather than allowing the US airlines themselves to decide what services to offer, allowing their passenger to vote with their feet, can only have a negative impact.”

So, you may be asking: “Why in the world is this blog entitled ‘Well played Continental. Well Played!’ when RWG is spouting off – again – about the Hang-Up Act?”

Well, I felt I owed you an explanation for why I didn’t get a chance to post a blog about Continental Airlines’ announcement yesterday that it will install Aircell’s Gogo in-flight Wi-Fi service on 21 Boeing 757-300s that largely fly domestic routes. I was, quite simply, otherwise engaged (but thanks for the emails, oh curious readers).

I did manage to squeeze out an article for the Flightglobal IFEC channel, which explains how Continental as expected will also install LiveTV’s basic Kiteline email service on 30 Boeing 737-900ERs that already have LiveTV’s latest live television system on board.

Management at Continental can now sit back and see if passengers prefer to pay a fee of $6 for TV and get free email (on those 30 737s) or pay the standard rates for Gogo Internet (barring special promotions) on the 757s. Heck, some passengers might opt to do both, once the 757s are equipped with live television.

I applaud Continental’s studied approach to in-flight Wi-Fi. It makes a ton of sense, particularly in light of the fact that the pay-for-Wi-Fi model is under such duress.

But as impressed as I am with Continental’s approach, the carrier probably doesn’t deserve all the credit. Some of it, at least, may need to go to Aircell as well as JetBlue and Lufthansa.

You are now entering “things that make you go hmmmm, speculative territory’. Enter at your own risk and with the full knowledge that none of the players mentioned below have confirmed a darn thing. Not a darn thing! So, if and until they do, I’m going to have to cover my derriere and file this under SPECULATION.

Aircell is widely believed to be footing the cost of installs on its airline customers’ aircraft. While Aircell has never confirmed this to anyone (at least not publicly to my knowledge) IFEC insiders talk about it like it’s a given.

So, if Aircell is indeed footing the cost of installing Gogo on Continental, the carrier would be silly not to take the Chicago-based firm up on its offer. After all, what does Continental stand to lose?

So, well, a thanks might be owed to Aircell.

[Unrelated aside - It's interesting that yesterday's press release from Continental didn't mention anything about the simultaneous Kiteline email trial. I wonder if Aircell had a say in that. I'm imagining Aircell might have said: "Hey, we're giving this to you for free, for the love of Pete. This is not about LiveTV."

But Continental might also want to send a “thank you” and a “Happy Christmas” to LiveTV parent JetBlue and Continental’s Star Alliance partner Lufthansa. Why?

Because, in the first case, JetBlue is believed to be helping to finance the installation of its subsidiary LiveTV’s latest – and best – live television service, LTV3, on Continental’s aircraft.

No, JetBlue has not confirmed this either (at least not publicly to my knowledge), although LiveTV has been vocal in the past about its general willingness to assist with financing.

If JetBlue is financing the installs on Continental, there is method to its madness.

With the help of Merrill Lynch JetBlue has been studying what to do with LiveTV, including a possible spin-off. By ensuring LiveTV has a high-profile customer like Continental, JetBlue is making LiveTV look much more attractive to the market.

So, well, a thanks might be owed to JetBlue.

But why does Lufthansa deserve any credit? In January 2008, Lufthansa acquired a 19% stake in JetBlue. That’s the same month that the Continental deal with LiveTV was announced.

Does Lufthansa want to see JetBlue spin-off LiveTV? If it does, and if Lufthansa supports (or even urged) JetBlue to make LiveTV more attractive to the market well, a thanks might be owed to Lufthansa.

Bottom line, though, if Continental is having the best live television system AND Gogo in-flight Internet installed on its aircraft at little or no cost to the carrier, then Continental might be in the sweetest freaking IFEC spot in the whole US airline industry.

And to that I’d have to say “Well played Continental. Well Played.”

You’ve always looked like the brightest tool in the legacy airline shed. Darn it if you don’t continue to shine!

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One Response to Well played Continental. Well played!

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