Inflight Internet Advancing: Six Carriers Further Plans For Airborne Access

Domestic airlines are working to deliver the next must-have amenity, inflight Internet, as at least six carriers in the past two months have advanced plans to offer connectivity in the sky.

Though carriers have taken divergent approaches to the depth of access, pricing models and the number of aircraft in which they initially will install offerings, inflight connectivity is expected to become widespread in coming years.

Forrester Research vice president and principal analyst Henry Harteveldt said inflight Internet is nearing critical mass in the domestic airline business. According to a report released last month, Harteveldt expects onboard Wi-Fi to eclipse other inflight entertainment options within a few years.

Alaska Airlines, American Airlines, Continental Airlines, JetBlue Airways, Southwest Airlines and Virgin America instituted plans to make some form of inflight connectivity available.

Jack Blumenstein, CEO of inflight connectivity provider Aircell, which has agreements with American and Virgin America, said he is in discussions with other major U.S. airlines.

Meanwhile, according to US Airways, "while we're looking at inflight connectivity options, we have no firm plans to put it on aircraft right now." United Airlines said it is "reviewing various technologies to find the solution that would be most reliable for our customers." Though Delta Air Lines claimed it is "always pursuing the latest technology," it noted that other entertainment options, including on-demand television and video games, "is our first focus."

Forrester's Harteveldt expects inflight Internet to grow as a competitive differentiator and revenue generator. Carriers without offerings, Harteveldt said, would be "vulnerable to poaching from competitors."

Orbitz for Business last month surveyed 640 business travelers, and found that 59 percent would use the inflight Wi-Fi equally for business and pleasure, and 21 percent who would use the service exclusively for business purposes. However, 56 percent of the respondents said inflight Wi-Fi was "not a necessity" and would not go out of their way to book flights that ensured access. Thirty-six percent "would try to get a flight with Wi-Fi available, but wouldn't be bothered if it weren't," Orbitz for Business found.

Helping to drive demand, according to communications providers are an ever-growing number of Wi-Fi-enabled laptops.

In recent years, companies such as Aircell and Row 44 have refined offerings that they say are cheaper, lighter and easier to install than the failed Connexion by Boeing—the once-dominant inflight Internet service, ultimately shelved in 2006 amid high costs and minimal demand.

The removal of those obstacles has driven carriers to buy in, Blumenstein said. However, even those carriers remain in testing phase.

American Airlines last month said that it has wired the first of 15 domestic aircraft with Aircell Internet capabilities, paving the way to install the offering by this summer on most of its transcontinental fleet. Aircell expects to offer the service to all AA customers on those planes, and American said it could expand the offering to its domestic U.S. fleet.

Virgin America also is gearing up to launch Aircell's offering, which will be available on passengers' laptops and handheld devices and integrated with the carrier's inflight entertainment system. It plans to roll out the service fleetwide this year.

Southwest Airlines last month also firmed plans to test inflight Internet access with satellite-based connectivity provider Row 44, which will conduct trials on four planes this summer. Alaska Airlines also is working with Row 44 to test satellite-based Wi-Fi, with the goal of an eventual fleetwide rollout. A Row 44 spokesperson said Alaska, which will first conduct trials on a single aircraft, would be on a similar testing timeframe as Southwest.

JetBlue in December became the first domestic carrier to offer free, though limited, Wi-Fi availability. Accessing its LiveTV subsidiary's 1 MHz of spectrum purchased at a Federal Communications Commission auction last year, JetBlue made limited connectivity options available through some BlackBerry devices and on laptops that use Yahoo! Mail or Yahoo! Messenger. JetBlue said it plans to expand options on its trial A320 aircraft.

Continental also said it plans to use LiveTV's offering to make inflight Wi-Fi available, beginning early next year with an inflight entertainment system installation on domestic aircraft, "subject to LiveTV being able to offer the service, which is still in the testing phase," the carrier said. Continental plans to offer complimentary LiveTV access to first class customers, and charge $6 for economy passengers.

Several carriers, including American and Southwest, also plan to charge for the service. Harteveldt said carriers could generate incremental passenger revenues from Wi-Fi. "They shouldn't feel compelled to offer this amenity for free. Passengers will pay for it," he said.

Aircell's Blumenstein said customers should expect to pay about $12.95 for Internet access on transcontinental flights, and closer to $10 on short-haul service. Row 44 said it would develop pricing, with individual airline.

jboehmer@btnonline.com