“In a sure sign of how important ubiquitous internet connectivity is to all of us, this WSJ article points out the steps airlines are taking to make Wi-Fi a better experience. Those of who travel too much have a love/hate relationship with airline Wi-Fi. We love the ability to get that important email out, or do some movie streaming or Amazon purchasing without the possibility of an intruding phone call; but we sometimes hate the flakiness of the service – too slow, sometimes it just doesn’t work, and Mary the stewardess isn’t much technical help when you simply ask her to reboot the darn thing. And of course we also occasionally resent/hate the fact that someone thinks because there’s Wi-Fi you still need to working with nose-to-the-grindstone not enjoying a brief respite from work with a good book (or Kindle). But it’s too late to be whining. Airline Wi-Fi is here and is rated as a top service customers want. And we want it to be fast, reliable and free.” Read the article below.
By Scott McCartney
Wi-Fi pricing on airline flights has gotten as inconsistent as, well, Wi-Fi service on some airline flights.
Slow and shaky air-to-ground service costs $39.95 on Alaska Airlines flights between New York and Portland, Ore., for example. But Alaska is transitioning to faster satellite-based service. So planes with that equipment offer much better service—at $20 a flight.
For many travelers, Wi-Fi on planes has gone from luxury to expectation. And the good news is that airborne Wi-Fi providers say the service will likely become free on most flights in about two years.
JetBlue already offers free Wi-Fi from gate to gate. Alaska, Delta, Southwest and a bunch of foreign carriers offer free text messaging. But other airlines must upgrade their planes to satellite service so that they can handle heavy usage—lots of passengers streaming video, for example.
Once that happens, one huge carrier, likely Delta, is going to make Wi-Fi free on its flights and others will follow, industry officials predict.
Airlines are already trying to get sponsors to cover the cost of providing the service in the sky. T-Mobile sponsors some Gogo Wi-Fi for its customers. Apple pays so that Apple Music is free on American Airlines flights, while JetBlue’s free domestic Wi-Fi is sponsored by Amazon.
Delta experimented with free Wi-Fi on a few flights in May to test how much passenger usage increases when offered at no cost and to see how the Gogo satellite-based service performs under heavy use. The tests didn’t include video streaming.
“We are continuing to test to make sure we can offer the best experience our customers tell us they prefer, and we continue to upgrade our technology,” a Delta spokeswoman says.
Delta won’t discuss results of the free trials. But Delta chief executive Ed Bastian has made it clear he wants to offer free Wi-Fi. “Our goal is to make Wi-Fi free with high-speed quality,” Mr. Bastian said in a Barron’s interview in June. “It will take another year or two to make that happen.”
That’s left other airlines trying to figure how they’ll respond, says Oakleigh Thorne, chief executive of Gogo, which provides Wi-Fi service to about half the airline industry. Some are considering partial free: free email and web surfing, but with video streaming as an added cost, for example.
“All airlines have talked about free at some point. Some of them fear it. Some of them think it’s an opportunity,” Mr. Thorne says.
Ironically, investing hundreds of millions of dollars in new equipment will drive the price down. Welcome to the airline industry.
Why free? Wi-Fi is really important to passengers, ranking ahead of amenities like food and legroom in some passenger surveys. Some airlines say Wi-Fi is the biggest single source of complaints they get.
If they improved that service, airlines could essentially buy customer satisfaction. And they’ve learned that taking out a credit card is a big disincentive to using Wi-Fi. Free would mean happier passengers and could create a competitive advantage if rival airlines can’t match the offer.
Gogo says it has about 1,800 planes at U.S. airlines equipped with air-to-ground Wi-Fi, which frequent fliers sometimes label Slowgo or Nogo. Many are regional jets or older planes that won’t be upgraded to satellite service before retirement.
In the early days of airborne Wi-Fi, Gogo gave airlines equipment. Gogo charges customers on those aircraft and pays royalties to airlines. With satellite service, the business model has changed. Airlines typically pay for the equipment and the service and charge their passengers themselves.
High pricing on the older systems is meant to discourage use—too many users mean the service will be slow and inconsistent. Both Gogo and Alaska say prices haven’t changed in the past couple of years.
“We expect the price to come down as more planes that have the new equipment fly that route,” an Alaska spokesman says of the $39.95 price to Portland set by Gogo.
United, which has satellite-based service on its flights, says it also adjusts prices based on passenger demand. “Part of that is to ensure enough bandwidth for users, making it a better experience,” a spokeswoman says.
While satellite systems have a lot more capacity, overload can be an issue, especially with older satellite equipment. It’s not just the people on your flight competing for bandwidth, but perhaps the 100 airplanes in the area, or 1,000 all hitting the same satellite and possibly slowing down service.
Sponsorships to cover the cost have been a chicken-and-egg problem for airlines. Passengers constitute desirable clientele for marketers. People who fly have income to spend.
But as little as 6% to 7% of passengers buy Wi-Fi, according to some industry estimates. So potential sponsors think they won’t be reaching many people. Yet if free, 40% to 60% of all passengers use it, Wi-Fi companies say, and a sponsor can reach a large audience.
Mark Dankberg, chief executive and co-founder of Viasat , an in-flight Wi-Fi provider, says on certain flights when Wi-Fi is free, the number of connected devices exceeds the number of passengers. Some people stream music with a phone while they work on a laptop.
American, which has upgraded its fleet to mostly Viasat service, says it has seen “take rates” for major live events like the World Cup and Super Bowl as high as 60%, and the satellite service handled it. “We’ve had aircraft with 80 to 120 people streaming and it works flawlessly,” Erwan Perhirin, American’s managing director of customer experience and onboard products, said at an industry conference this spring.
Another concern for airlines considering free service: the amount of data we use keeps rising with more photos, videos, music streaming and other online uses. One streamer takes the bandwidth of 10 non-streamers. So as more data gets transmitted, costs to airlines of free service could keep climbing.
“Every year the number of people who use the system and the bandwidth use both increase,” Viasat’s Mr. Dankberg says.
PRICING BANDWIDTH
Prices for airline Wi-Fi vary widely and have no correlation with quality of the service. Slow is expensive, while fast is cheaper. Here are the lowest and highest prices at U.S. major airlines.
- American: $10 to $19 per flight
- Delta: $5 to $40 per flight
- United: $2.99 for an hour up to $41.99 for a full flight
- Southwest: $8 flat fee per flight
- JetBlue: Free
- Alaska: $6.50-$39.95 per flight
Source: The airlines
Write to Scott McCartney at [email protected]