Aviation Airlines rush to add WiFi By Michael Fabey / August 08, 2009 Share 1 -- The long wait to use WiFi on domestic flights is quickly coming to an end.In response to demands from increasingly connected leisure and business travelers for Internet access aloft, every major U.S. carrier is in the process of outfitting aircraft with WiFi or at least is testing the service.In fact, AirTran has already equipped its entire fleet for WiFi, becoming the first U.S. carrier to offer the service on every flight. Meanwhile, most airlines are still deciding how much to charge, which planes to connect and how much to invest.AirTran charges $5.95 for access on flights under three hours and $9.95 for three hours or longer. Passengers can also choose a 24-hour pass for $12.95 or a 30-day subscription for $49.95."WiFi service appeals to business and leisure travelers," Kevin Healy, AirTran’s senior vice president for marketing and planning, told Wall Street analysts in July. "It puts the entertainment choice in the hands of the user, rather than us trying to figure out what people want to see or look at. It is big for a business traveler to be able to know with certainty that you’ll have the service when you need it."Owen Wild, director of marketing, strategy and planning for Amadeus North America, sees WiFi as a must-offer service that could differentiate airlines depending on dependability, reliability and cost. It’s necessary, Wild said, for people who spend a lot time in airplanes but feel a strong need to stay connected while traveling.Current onboard WiFi services come with some caveats. There are few power ports on most planes, so most passengers have to rely on their own batteries. Some features, like streaming video and voice over Internet protocol (VoIP) telephone calls are blocked because of bandwidth or other concerns. And some airlines block what they consider inappropriate Internet sites.Most passengers would rather have restricted access than none at all, analysts said."This gives the consumers the choice," Wild said.It also gives carriers an opportunity to increase revenue, though airline execs and analysts said it’s still too soon to predict how much extra the carriers stand to make."It won’t be as much as the half billion dollars they make each year from baggage fees," Wild predicted. "But it could be very significant."Wild differentiated WiFi from other services, such as checked baggage, that were previously included in base fares and then were unbundled and offered for a fee. "This is a new service enhancement," he said, which means there is likely to be less consumer resistance. Passengers would be willing to pay to make sure the airline’s WiFi service worked well, he said.Still, JetBlue CEO David Barger told analysts that airlines have to be wary of "the perception of nickel-and-diming" when it comes to services like WiFi: "We’re going to be real careful." JetBlue is now testing its "BetaBlue" aircraft, an Airbus A320 with free WiFi.Around the industry and for the near-term, however, free is likely to be the exception. Analysts said airlines need all the extra money they can get right now."The point is that it is an additional revenue stream," said airline consultant Darryl Jenkins. "Anything extra at the margin is very good news." With the exception of AirTran, airline executives are still deciding how they will deploy and price the service. Fees vary, depending on the airline and, in some cases, on the flight length or market. Pricing the product has to cover the cost of outfitting aircraft for WiFi as well as making sure it works as advertised. Estimates run as high as $500,000 per plane."Clearly this has to be foolproof," Wild said. "The last thing you want is to burden the flight attendant with the job of tech support."Even so, Continental, unlike JetBlue, is plunging into WiFi without any trials."Our customers want more in-flight entertainment and communication options," Larry Kellner, Continental’s chairman and CEO, said in January as the airline released details of a new agreement with LiveTV for in-flight, satellite-based WiFi. The deal covers Continental’s fleet of 737s, including the 737-700, -800, -900 and -900ER aircraft, and the 757-300, contingent on LiveTV’s ability to deliver the service as planned.The airline said it would offer complimentary WiFi access to all first-class customers but would charge others a $6 access fee. However, the airline also said it was still formulating its long-term WiFi plan.Alaska Air has been testing a satellite-based WiFi system known as Row 44 on a single 737-700. It recently released a survey of the 2,100 or so passengers who had logged on and used the service. More than 96% said they intended to use it again; another 78% said they are either "extremely likely" or "very likely" to recommend it.More than 75% rated the service as either "excellent" or "very good."About 35% of passengers accessed the service with portable devices such as smart phones. Other passengers surfed the Web on laptops or similar devices.Alaska has yet to set a fee for the service.Southwest, which also uses the Row 44 satellite system, is testing several price points for its WiFi service, changing the fees every two weeks.During the first week of August, for example, the airline charged laptop users $10 for long-haul flights, $5 for medium-haul trips and $3 for short jumps, while smart-phone users paid $6, $4 and $2 respectively for those distances.Because of the way Southwest routes its aircraft, the airline cannot provide advance notice of where and when its four WiFi-enabled planes will be flying, so it sends out Twitter tweets to alert flyers which planes will have the access."To preserve a high-quality experience," Southwest does not allow voice calls or applications that consume extreme bandwidth, such as video downloads.Some airlines are relying on tweaked ground-based cell communications technology for their WiFi service. The major provider of such terrestrial service is Aircell, which offers a product called Gogo.Analysts said there appeared to be no qualitative difference between the land-based and satellite-based systems.AirTran uses Gogo, as do American, Delta and United.U.S. Airways announced last month that it would be installing Gogo on A321 aircraft flying select domestic routes starting in early 2010. Passengers can find a map detailing those planned routes on the carrier’s website. Later this year, customers will be able to check which flights have the service if they book on the site. Pricing will range from $5.95 to $12.95, depending on flight time and the type of device.Gogo is also available on all of American’s 767-200s and some MD-80s, and it is planned for its 737 fleet as well. American makes the service available for those flying across the continental U.S. It also offers the service on flights to Mexico and southern Canada, though only within 100 miles beyond the U.S. border.Most onboard WiFi services offer passengers Internet access for email and virtual private network access but deny them cellphone and VoIP services.American charges $12.95 for transcontinental flights and flights of more than three hours. Service will cost $9.95 for shorter flights and $5.95 for flights of 1.5 hours or less. The fee for smart phones and other handheld devices will be $7.95.Delta has so far installed Gogo on about 200 MD-80s or MD-90s and is looking to add it to Boeing aircraft soon. The service works on domestic routes or some international flights while the aircraft is close to U.S. borders."We’re looking to offer international service, too," said Delta spokesman Paul Skrbec.Delta’s fees mirror those of American, but Delta is also considering offering some longer-term accounts similar to those offered by AirTran, Skrbec said.Delta also is blocking VoIP as well as websites the carrier says are inappropriate.United also plans to start its WiFi service soon on 757s specially configured for extra business-class seats on transcontinental routes between New York and Los Angeles or San Francisco. It will be offered to first-and business-class passengers for about $12.95 per flight. It will not be offered in coach."I’d like to see some alternative price plans made available so that if I only needed to use it for, say, an hour on a cross-country flight, I could buy an hour’s worth of time for less than the full price," said Darin Lee, an analyst with the LECG consultancy.Carrier executives acknowledged the fees could change.Amadeus’ Wild said that corporate travel managers would likely negotiate deals, and travel agents or other distributors would assemble packages that include WiFi access."One thing they still have to work out is how to pay for this on the distribution side," Wild said. "Whether it be through travel agents or at the kiosks, they need to figure that out."Vaughn Cordle, an analyst with the AirlineForecasts consultancy, predicted that eventually WiFi access would be free on airlines, just as it already is in many hotels."Everyone will charge for the service initially because of the cost of setting it up, but over time I think it will be free," he said. "Passengers will not appreciate it if airlines charge them to check their email."Airlines will find other ways to make money off the service, he said, such as advertising. Meanwhile, passengers say the access is worth the cost.For example, in the Alaska survey, passenger C.J. Adams of Marysville, Wash., commented: "As a frequent business traveler, I was thrilled to have Internet access while in flight and appreciated the opportunity to work in real time. It even made my flight seem shorter."