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Alaska nears pricing strategy for Wi-Fi

Alaska Airlines has been narrowing pricing options for in-flight connectivity as the carrier determines which Internet solution to use fleetwide.

Seattle-based Alaska has been testing Row 44's broadband Internet offeringin revenue service on a single Boeing 737-700 since February, and plans to select an Internet solution this yearso it can complete fleetwide equipage in 2010.

The airline has priced Wi-Fi between $1 per flight and $10 per flight and also offered free connectivity.

Alaska has been able to whittle down pricing to a couple of "sweet spots", Alaska manager of product development and market research Chase Craig tells ATI. He adds that the operator is also contemplating a tiered pricing structure split between short-haul and long-haul flights.

While uptake is less when the airline charges $10 per flight compared to lower price points, customers have shown a willingness to pay for connectivity, and the largest amount ofpaid usage is notnecessarily occurring at $1 level, he says.

Uptake rates have been above 20% on short-haul flights when the airline charges for Wi-Fi, Craig adds, declining to detail usage at specific price points.

Passengers have been using connectivity for email, Web surfing and video streaming, he says, noting that social networking sites are especially popular. VPN usage is also common among Alaska's passengers, he adds.

In addition, passengers using laptops to go online tend to consume more data than passengers using handheld devices to access the Internet, Craig says. However, a growing percentage of passengers using handheld devices sometimes surpass laptop users with the amount of streaming media, email and web surfing done in-flight.

As the airline sorts through Wi-Fi pricing, Alaska is also working on an optimised interface for mobile devices, he says.

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