If you can’t beat the Internet, offer it!

Oh sure, there were signs that Alaska Airlines was engaged in some serious thought about its in-flight connectivity strategy.

During a recent investors call, the carrier said it had completed its test of Row 44′s Ku-band solution on revenue flights and was now deciding between Row 44 and Aircell’s Gogo air-to-ground (ATG)-based offering.

“We’ll definitely be making a decision here in the coming weeks on which system,” Alaska vice president of marketing, sales and customer experience Steve Jarvis said at the time. (If you’re not reading the Flightglobal IFEC site, you should be!)

Still, this morning’s announcement that Alaska will roll-out Gogo fleet-wide came as a little bit of a surprise. Hadn’t Alaska originally vowed to offer Row 44 across its fleet should the trial prove successful? Indeed it had.

So what has changed?
 
Alaska cites “speed” of installation as a prime driver to its decision. And in fact Aircell has got the Gogo install down to an absolute science (accomplished in an overnight).

Cost is also mentioned in Alaska’s statement. And yes, the Gogo system is a darn sight cheaper than Row 44.
 
But could something else be at play here?

US low-cost behemoth Southwest Airlines recently announced it has signed an equipment purchase agreement with Row 44, and plans to start rolling out the service ON 15 AIRCRAFT PER MONTH from the second quarter (it already offers Row 44 on a handful of 737s, as part of a prior trial).
 
Financial details of the Southwest/Row 44 deal have not been disclosed. But the devil, as they say, is in the details, and I’ve got a feeling the details tell the story here.
 
PURE SPECULATION FOR THE FUN OF IT

Is Southwest financing part or all of the Row installs? If it is, then that would no doubt leave Alaska in a holding pattern, waiting for equipage of the Southwest fleet to be complete. On the flip side, Aircell finances installs of its Gogo equipment.

Or, perhaps Southwest has taken a page out of the JetBlue handbook and invested in Row 44, as JetBlue did with LiveTV.

We know that Southwest doesn’t like to swim with the pack. Maybe Southwest wants total control. If that’s the case, I wonder when it would need to alert investors about such a move?

From what I can tell, the only mention of in-flight Internet in Southwest’s recent 10K is in the following par:


Other Initiatives. During 2009, the Company also continued to work on other initiatives designed to pave the way for additional revenue opportunities, such as an enhanced Rapid Rewards® frequent flyer program, inflight Internet connectivity, increased sales distribution channels, and Business Select product enhancements. In addition, during 2009, in connection with the Company’s previously announced plans to implement a codeshare relationship with Mexican carrier Volaris, the Company began offering Customers the ability to book flights to Mexico on Volaris via an online link to Volaris’ booking portal on www.southwest.com. The Company has delayed implementation of its codeshare arrangements with Volaris, as well as with Canadian carrier WestJet, in order to reallocate staffing and technology resources to support nearer term revenue opportunities.

But Southwest mentions the word “Internet” in another spot, which I find very interesting.

“… the airline industry also competes with alternatives to travel such as videoconferencing and the Internet.”

So, if you can’t beat the Internet, offer it!

(Photo of Alaska tails from 737700′s Flickr stream)

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4 Responses to If you can’t beat the Internet, offer it!

  1. Yossarian February 24, 2010 at 11:11 am #

    Aircell is consistently installing it’s ABS on A319′s in 8 hours, two aircraft a night.

  2. Paulo M (Johannesburg, RSA) February 24, 2010 at 2:52 pm #

    If you can’t beat the Internet, offer it!
    &
    “… the airline industry also competes with alternatives to travel such as videoconferencing and the Internet.”

    They could be offering videoconferencing from parked airplanes if companies further trim travel expenses. ;-)

    ——–
    Very interesting piece on inflight connectivity. Still early days. You’d want to be sure that your technology investment is the right one. Ground based solutions ideal for continental operators. Satellite based solutions – operations to Hawaii (or anywhere else you can’t plant cellphone towers.)

  3. Rearseat February 25, 2010 at 9:51 am #

    I think this is a blow to Row44…I can’t imagine their partners being too happy about losing an installation deal across an entire fleet.

  4. Rearseat February 25, 2010 at 10:12 am #

    This is a blow to Row44…I can’t imagine their partners being too happy about losing an installation deal across an entire fleet. Now, there is still a question for Alaska Airlines: will you offer Gogo on flights to Hawai? If so, how?