A Third Of Domestic Flights Offer Wi-Fi, But Few Passengers Pay - Business Travel News

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A Third Of Domestic Flights Offer Wi-Fi, But Few Passengers Pay

September 18, 2012 - 04:55 PM ET

By Jay Boehmer

For all the progress airlines in recent years have made to expand wireless inflight Internet access, such services are available on less than a third of daily domestic U.S. flights, and only a small percentage of passengers pay to log on. While travelers gradually are using inflight Internet more often, airlines continue to work toward Wi-Fi ubiquity—even if they lose money getting there.

As of Monday, 31 percent of domestic flights in the United States were equipped with Wi-Fi, according to an analysis provided to BTN by flight rating website Routehappy.

As the dominant provider in the United States, Gogo in an August U.S. Securities and Exchange Commission filing disclosed that as of June 30, it had outfitted 1,565 commercial aircraft with wireless Internet capabilities—a 36 percent increase from the same period in 2011.

For the first half of 2012, Gogo reported a 5.4 percent usage rate among commercial airline passengers flying on Gogo-equipped aircraft. That figure had grown from 4.3 percent during the same period in 2011.

Delta Air Lines operated more than half of all domestic flights with Wi-Fi access, according to Routehappy.

While the carrier has enabled Gogo's wireless connectivity across its mainline fleet as well as on two-class regional services, the lack of availability on smaller regional jets explains why about 35 percent of Delta's domestic flights don't have wireless access. Delta, meanwhile, has plans underway to tap into Gogo's nascent satellite technology to offer transoceanic Internet access. Some international and domestic players similarly are evaluating or rolling out Wi-Fi technology for overseas flights. 

Southwest Airlines operated the second-highest number of flights in U.S. airspace with wireless access, representing 35 percent of its flights, according to Routehappy. The carrier has broken with the pack by partnering with Row 44, a competitor to Gogo. Meanwhile, 100 percent of flights operated by Southwest's AirTran subsidiary offer Gogo Wi-Fi. Similarly, Virgin American has installed wireless access fleetwide.

Routehappy reported that 22 percent of American Airlines' domestic flights offered wireless services. That number is likely to spike in the coming years as the carrier through 2017 refreshes its narrowbody fleet, including widespread Wi-Fi access in domestic markets.

US Airways also is poised to greatly expand the service. While only 8 percent of its flights currently enable Wi-Fi, according to Routehappy, the carrier in March announced plans by mid-2013 to expand Gogo inflight Internet service to 90 percent of its mainline domestic fleet as well as some regional aircraft.

Among the largest U.S. carriers, United Airlines is currently the laggard. While Routehappy estimates that less than 1 percent of United's flights are equipped with Wi-Fi, the carrier by 2015 plans to outfit its entire mainline fleet—including aircraft serving transoceanic routes—using Panasonic-powered satellite system.

As airlines continue to rapidly expand onboard Internet access, it would appear that at least for now some are doing so at a loss.

"The usage rates are low," US Airways president Scott Kirby told journalists during a March meeting in Phoenix. "Ours are consistent with the industry; they are below 5 percent. The break-evens across the industry at large are more than 20 percent. That said, I think it's going to be something that becomes prevalent across the industry because of competitive reasons."

Citing competitive reasons, JetBlue this week revealed its plans beginning early next year to outfit aircraft with Wi-Fi in conjunction with ViaSat and its LiveTV subsidiary. According to a memo posted on technology publication The Verge and validated by the carrier, chief commercial officer Robin Hayes claimed the JetBlue's solution would operate at speeds faster than those available in the marketplace. Additionally, the carrier "decided to make the baseline connectivity free, at least until the first 30 aircraft are equipped with our service," according to Hayes.

According to flight information provider FlightView, which this year surveyed more than 600 business travelers, 28 percent expressed dissatisfaction Wi-Fi options provided by airlines.

"Currently, Wi-Fi on board is a competitive advantage," according to the JetBlue memo. "Customers, especially those traveling for business, with everything else being equal, will choose the airline that offers connectivity, even if the service is spotty or expensive."

While a handful of travel buyers speaking with BTN last week said they had not seen evidence that their corporate travelers are choosing flights based on Wi-Fi availability, one indicated early signs that the amenity is driving some purchasing decisions.

"We've seen direct markets where there are two carriers—one that has Wi-Fi and one that doesn't—and the bleed is happening," said Oracle travel buyer Rita Visser. "The only thing we can contribute that to is the availability of Wi-Fi."

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