Hallelujah: U.S. Airlines to Offer Wi-Fi

As reported by Scott McCartney in today’s Wall Street Journal, U.S. airlines will begin offering wireless Internet access within a year. VOIP calls will be prohibited for now; but airborne phone use may well become a reality one day. Here are the salient details:

AirCell will install equipment on airliners that will act as a WiFi hotspot in the cabin and connect to laptop computers and devices like BlackBerrys that have WiFi chips. In all, it will cost about $100,000 to outfit a plane with less than 100 pounds of equipment, and the work can be done overnight by airline maintenance workers, AirCell says.

What makes the service particularly attractive to airlines is that they will share revenue with AirCell. The service will cost about the same as existing WiFi offerings. Mr. Blumenstein says it will charge no more than $10 a day to passengers. It will also offer discounted options for customers and tie into existing service programs like T-Mobile, iPass and Boingo. Speeds will be equivalent to WiFi service on the ground.

AirCell will block voice calls over the Internet with services like Skype — except for pilots, flight attendants and air marshals, who will be allowed to talk to people on the ground for scheduling, safety and security issues.

How will Internet access change airline travel? You would expect to see a bump in productivity for certain types of workers. Bloggers, for instance, can now offer live descriptions of the Grand Canyon from 35,000 feet. If big news happens on the ground during your flight, expect it to travel fast through the cabin.

I for one am all in favor of airline Internet access; but I am just as resolutely not in favor of airline phone chatter. And so, while the former won’t necessarily lead to the latter, I fear that it probably will.

Then again, it’s hard to predict what will happen in this realm. As I blogged here earlier, the Connexion by Boeing service, which offered Internet access on various international flights, shut down last year due to lack of business.


zadig

If they allow SSH, won't users just be able to establish an SSH connection with any system on the ground, and tunnel their VOIP connections through that? Seems like a silly requirement meant to maintain their monopoly on in-flight calling services.

dpm

I agree with the previous poster -- give any moderately-competent script kiddie (not to mention real coder) and hour or two, and you'll be able to make voice calls to your heart's content.

If all the resources of the Chinese government can't prevent the free flow of information over the Internet, what makes U.S. Air think it can? Once you have a net connection, you can find a way to do anything you need to.

mgjosefsen

The other great benefit will, of course, be not to miss live sporting events. But the banning of VOIP calls is obviously completely silly. With the noise already in the cabin, I do not think this will be a problem (if it is the extra noise you are worried about).

thurm12

I agree that VOIP calls would get annoying. I think the addition of email and IM capabilities should be enough to talk to the world.

furiousball

The price isn't bad, how much was Boeing charging in the failed previous model? I would love having an internet connection on long flights.

kentavos

Personally, I can't stand the idea of VOIP or cell phone use during a flight. I prefer the drone of the engines to mindless chatter or self-important conversations.

However, I don't think it'll be an issue for a while. I don't believe the service will be very successful.

There are a number of factors that will cause this to fail.

1. Limiting the service to large planes. For most of my travels, I tend to fly 3 hours on a small plane and then 1 hour on a large one. If the small plane does not have the service, there is no way I would spend $10 for 1 hour worth of use.

2. Passenger's expectations. I believe most people have an expectation that internet access should be free when in public areas. I think we see it as a utility similar to electricity or water from bathrooms and water fountains. I think this expectation makes it even harder for people to pay for access than normal.

3. Quality. There are so many reasons why a network may fail. I doubt the flight attendants are going to be well trained in trouble shooting those issues and resolving them.

4. And so on. Internet access on planes is a great idea, but I don't think consumer's will pay for it.

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dkusleika

http://en.wikipedia.org/wiki/Connexion_by_Boeing

Wikipedia says $10 per hour for Boeing Connexion. This one will fail too. For a two hour flight, there's probably only an hour you can be using it. The only way it makes sense is if I can have it on both of my flights and the layover in between. If I have a direct flight, it's just too much money.

I'd tell them to offer it for free, but people seem to be so cost conscious when it comes to airline tickets, I don't think they'd increase passengers with this service.

They need a different revenue model. What about: Sign up for an account and give a credit card. The account is good forever and your credit card is billed thusly: first hour of every day is free, $2 per hour or part of an hour thereafter. I'd pay for that. Or you could make the account expire after a day with basically the same terms, you'd just have to enter your credit card every day.

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jreifler

I think smart airlines (if there are any other than Southwest) will offer it for "free" and simply charge a slightly higher rate--and advertise the hell out of being the airline with "free" wifi. Suppose it is business travelers who will use this service the most. It simply is easier for them to pay the upfront cost on the ticket, than to worry about getting a receipt and being reimbursed. (At an extra $1 per passenger and about 500 passengers per day per plane for a 737, it would take a little over six months to break even.) That has to be cheaper than wiring in 150 personal lcd screens to let people watch tv.

It also avoids complications like what a "day" is. Suppose you buy service, change planes at ORD, and your flight gets canceled (a reasonable scenario). Are you really going to be happy when you have to shell out another $10 bucks the next day for something you thought you had already paid for (internet access on the second leg of your trip).

This also could work on an advertising model. You have to watch two 30 second commercials every hour, then you get Internet access. It may be that people who travel are a coveted demographic

Adding free wifi would be a really clever way for Southwest to make more inroads with business travelers.

What do people want more, wifi (which is essentially a one time fixed cost) or better meal service (recurring and variable costs)? Airlines that are clever with amenities (DirecTV, XM radio, wifi) give themselves a marketing hook while getting "cost certainty."

I agree with the others, a $10 fee isn't going to cut it. Providing wifi will be like building a lighthouse--travelers will flock to your port/gate.

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chickenalaking

Take a look at www.minyanville.com for more on this subject. The Off-Balance Sheet has an article (written by someone I know quite well) called "Cell Phones at 35,000 Feet".

snubgodtoh

Price elasticity of demand never has been a strong suit of the airline industry.

jreifler, I think you should have been paid for your ideas.

id4johng

Interesting discussion. Aircell won't be in service till 2009, I don't suppose, since Verizon aren't vacating the relevant spectrum till at least 12/31/08; see http://www22.verizon.com/airfone/ - In fact, the truth is, a potential exists for Verizon to keep using this spectrum well into 2010. Not sure if Aircell or their backers understand this.

As for LiveTV, the narrow spectrum means this is not a broadband service. It will be interesting to see what LiveTV comes up with as a modem (none exist currently), and a business model, since they too must roll out an expensive network of towers, and justify it on narrowband messaging alone.

There will be service offered by satellite in North America before any Air-To-Ground , but the announcements have not yet been made public. Satellite service will be true broadband, and will allow much more functionality, IMO.

I do like jreifler's commentsa and ideas. They are quite insightful.

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JanneM

I used Connexion frequently, as a traveler between Japan and Europe. It was a lifesaver - no more crappy seatback "entertainment"; I could idly surf the web, text-chat with friends (over IM, not voice), do email, play online games. It transformed a 12-hour ordeal into a, frankly, OK time.

I also know why it failed.

The problem wasn't the price (use on a 12-hour flight for about $30 - I'd have paid the double). The problem, I got to understand, is the lack of power. I have a very power-frugal laptop and can actually use it on battery for most of that flight. But most people do not. They could use it for perhaps an hour or two, depending on the machine, the condition of its battery, and how much they've already used it in the airport and other places without recharging.

And flights, for some reason, do not provide power outlets in coach. But coach is where most people are sitting. Coach is also where other forms of entertainment is the most frugal. That is where there is least opportunity to do other kinds of work, would you be so inclined. And that is where you're most uncomfortable and cramped and would desperately like to get something to take your mind away from your current situation. But if you can use the internet only for perhaps an hour of a 12-hour flight, then you might as well not bother.

So in practice, the airlines offered Wifi not for the whole plane, but only for a fraction - perhaps 15-20% - of their passengers, and the fraction that would be the least likely to want a distraction from their current situation.

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rabidstoat

I agree with the posters regarding the security aspect of the service, and also see jreifler's idea of building the fee into the ticket price and then offering it for 'free' as the best way to go. The other way would be to style it after some internet cafes and offer a card system which you could top up with paid hours before you leave. The advantage of this system is that it avoids issues if your flight is cancelled or if you only decide to use the WiFi for 1 hour of your 4 hour flight.

The battery life issue is also pertinent, and it may see a (paid or free) inflight battery charging service added to the infrastructure alongside the WiFi.

To those who posted regarding only using it for a small portion of their short flight...think beyond your borders and consider eg. Australia where it is a minimum four hour flight to the next country, and at least a four or five hour flight between west and east coast. If I need to fly to say, London or New York, I am in that plane for a looong time.

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JanneM

Forget accounting for minutes and so on. Why make it complicated? Just set a fixed fee for the flight (based on time in the air, probably) and offer use of wifi and seat electric plug during the flight for that fee. You'd pay by ordering it as part of the ticket, buy it at the gate (pay the sum and they'll check the "activate in-air communications" box for your seat) or while in flight.

Acrobat

I would suspect that for business travellers, the difference between $10 and $20 is not large, especially for those already paying for a first class ticket. For those of us who can only afford cattle class as we travel with family, the inclusion of "free" internet and charging would definitely impact my choice of airline.

While the revenue model seems to be such that income is generated mainly from business, would it not be a huge selling point to add such a simple amenity?

One could start by introducing it on longer flights, predominantly those to and from "family friendly" cities such as Orlando, as well as cities with large universities (capture the traveling student and/or parent). Then roll it out to other segments over time.

I am against the whole "nickel and diming" in order to keep the visible price of airline tickets down - nothing irritates me more than to have to come up with exact change every time one of my kids needs a drink or something to eat. The first airline to go back to a truly "all-inclusive" will win, as far as I am concerned.

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amitrajit

Though wifi is welcome, hopefully cell phone calls will NEVER EVER be allowed on planes. It is enough with crappy peanuts and small seats and on top of that having to hear someone yapping at the top of their voice how much they "miss" the other person .... Noooooooooooooo !!!!!!! Most cell phone users have no sense of etiquette, so no cell phone

zadig

If they allow SSH, won't users just be able to establish an SSH connection with any system on the ground, and tunnel their VOIP connections through that? Seems like a silly requirement meant to maintain their monopoly on in-flight calling services.

dpm

I agree with the previous poster -- give any moderately-competent script kiddie (not to mention real coder) and hour or two, and you'll be able to make voice calls to your heart's content.

If all the resources of the Chinese government can't prevent the free flow of information over the Internet, what makes U.S. Air think it can? Once you have a net connection, you can find a way to do anything you need to.

mgjosefsen

The other great benefit will, of course, be not to miss live sporting events. But the banning of VOIP calls is obviously completely silly. With the noise already in the cabin, I do not think this will be a problem (if it is the extra noise you are worried about).

thurm12

I agree that VOIP calls would get annoying. I think the addition of email and IM capabilities should be enough to talk to the world.