Southwest intends to keep the introductory flat $5 rate for in-flight connectivity intact while fleet installations continue through 2013.
The carrier currently offers Wi-fi connectivity through Row 44's Ku-band satellite-based broadband system on 32 aircraft.
Asked by ATI and Flightglobal how long Southwest intends to extend the introductory $5 flat rate for all devices and at all stage lengths, carrier senior vice president of marketing and revenue management Dave Ridley says the introductory offer will extend throughout the system installation on the carrier's fleet. About 60 aircraft are scheduled for completion by year-end, and the carrier's fleet of Boeing 737-700s are scheduled for completed installs by year-end 2012. Ridley says certification to equip the carrier's -300 Classics is "progressing nicely", and installations on that aircraft type should be complete by mid-2013.
Ridley explains that Southwest tried various pricing levels of $3/$5/$7 and $5/$8/$12 in its Row 44 testing before settling on the $5 flat rate.
Southwest is also offering a free "walled garden" splash page for passengers featuring shopping, journey tracking and games. Ridley believes that with the lower $5 rate passengers using the free applications on the splash page are more likely to pay for extended Internet usage, which should result in a take-up rate "higher than what you see in the rest of the industry".
The revenue sharing scheme between Southwest and Row 44 differs from other Wi-fi suppliers and their partner airlines, where the bulk of the revenue flows to the Wi-fi provider, says Ridley.
Row 44 president Gregg Fialcowitz tells ATI the structure of the deal entails his company receiving a small fee for every Southwest passenger enplanement on a Wi-fi enabled flight.
Currently, Southwest passengers pay the flat fee for each segment, but Ridley says before year-end the carrier is aiming to transition the $5 rate charge to cover an entire journey.
Source: Air Transport Intelligence news