LAXintl
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US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:08 pm

The business conundrum continues for airlines.

Now with almost 1/3 of US airliner fleet featuring onboard wi-fi capability, only a small fraction of passengers pay for it leading to growing financial loss.

According to the provider Go-Go they see a mere 5.4% usage across their 1,565 fitted aircraft. While this has grown from a 4.3% usage rate a year ago, airlines are taking a loss on the service.
Its estimated that a 20% usage rate represents break-even point for the industry.

So what are airlines to do -- some like Delta have jumped feet first into embracing the technology. Is there a business case for it?

Off course, this does not answer the even bigger question - how long can folks like Go-Go remain in business as they also continue to produce year after year of losses as well.


Story:

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

http://www.businesstravelnews.com/Bu...assengers-Pay/?ida=Airlines&a=mgmt

=
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STT757
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:09 pm

UA wanted $17.95 for gogo on my PS flight from JFK to SFO. No thanks.
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LHUSA
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:15 pm

Quoting STT757 (Reply 1):
UA wanted $17.95 for gogo on my PS flight from JFK to SFO. No thanks.

From what I understand, Gogo sets the prices, not UA
 
werdywerd
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:15 pm

If you price it too high, people wont pay. Especially for spotty/slow service.
 
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ERJ170
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:18 pm

yeah.. me and my partner were flying DL EYW-ATL.. he was being charged $4.95.. I was being charged $9.95.. don't know the difference but I was like.. no thank you..
Aiming High and going far..
 
PSU.DTW.SCE
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:23 pm

Interesting.

Based entirely on antidotal observations, I would have guessed that the actual number of users was higher than 5% on most of the flights over 1-2 hours that I have been on, they could be entirely route / time-of-day specific.
That being said, sometimes can't tell if someone is on wifi or if they are just doing email whille offline.

20% seems like a break-even point that just is not realistic in the short-term. I'd venture to guess rates are much higher on routes like ATL-LAX, or stage lengths over 2-3 hours and almost nothing on routes like ATL-CLT.
 
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:24 pm

If B6 launches free Wi-Fi as planned, or if WN offers free Wi-Fi with Row44 (remember, WN doesn't charge for bags), I think Gogo will have to do something. They will either be forced to lower their prices or offer an ad-supported free option (much like some forms of airport Wi-Fi).

I used Gogo a little over two months ago on DL flights, but only to use Delta's mobile app (which is exempt from the normal fees). Right now, I wouldn't pay $7 to surf the web on an airplane, which is the price that Gogo was asking between DTW and DFW.
"Did he really need the triple bypass? Or was it the miles?"
 
FWAERJ
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:25 pm

Quoting ERJ170 (Reply 4):
yeah.. me and my partner were flying DL EYW-ATL.. he was being charged $4.95.. I was being charged $9.95.. don't know the difference but I was like.. no thank you..

Gogo charges different prices whether you use a laptop or a smartphone - phones get the lower price.
"Did he really need the triple bypass? Or was it the miles?"
 
catiii
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:27 pm

Quoting LAXintl (Thread starter):
Now with almost 1/3 of US airliner fleet featuring onboard wi-fi capability, only a small fraction of passengers pay for it leading to growing financial loss.

According to the provider Go-Go they see a mere 5.4% usage across their 1,565 fitted aircraft.

As someone who is a Go-Go user, I can tell you that the novelty has worn off because their technology cannot keep up with my technology. For example, they don't have the bandwith to stream Netflix, HBO Go, etc. Additionally, as noted below, the value isn't there for the price they're charging now. I think this is a huge part of the reason why they're seeing a low take-rate amongst customers.

Quoting ERJ170 (Reply 4):
yeah.. me and my partner were flying DL EYW-ATL.. he was being charged $4.95.. I was being charged $9.95.. don't know the difference but I was like.. no thank you..
 
mercure1
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:34 pm

Its indeed an interesting conundrum.

On one side you have a set of consumers which volcalize the desire for Wi-Fi connectivity, and on the otherside you have the airlines and the various providors which have now sunk billions into these systems and need to earn a return on their investment.

I think companies are finding out what Boeing did many moons ago with its failed Connexion platform, or GTE with its AirFone earlier.
Its incredibly hard business case to make with low consumer use on one one side and incredibly high cost on the other.
 
compensateme
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:41 pm

And, interestingly, Gogo's responding by raising its prices:
http://news.cnet.com/8301-1023_3-575...kes-up-its-in-flight-wi-fi-prices/

Apparently Gogo's trialing an elimination of the day passes with a flat, $10/hour fee.

[Edited 2012-09-24 09:44:39]
Gordo:like this streaming video,Sky magazine,meals for sale at mealtime-make customer satisfaction rank so high at UA
 
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:45 pm

Quoting catiii (Reply 8):
I can tell you that the novelty has worn off because their technology cannot keep up with my technology. For example, they don't have the bandwith to stream Netflix, HBO Go, etc. Additionally, as noted below, the value isn't there for the price they're charging now.

And it seems the more folks who tune in, the slower it gets. On my last WN flight, screen changes on their $5 Wifi were getting to 30 seconds. People watching the $6 Wifi-TV weren't doing much better.
 
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 4:50 pm

Quoting werdywerd (Reply 3):
If you price it too high, people wont pay.

Prices have run the range from pennies to sky high rates, and people aren't buying at any price.

Quoting FWAERJ (Reply 6):

If B6 launches free Wi-Fi as planned, or if WN offers free Wi-Fi with Row44 (remember, WN doesn't charge for bags), I think Gogo will have to do something.

Neither of those will be free in the long run.
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yellowtail
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:01 pm

If they did it at $1.99 per hour....I might bite to catch up on email. but system needs to be reasonablly fast. I don't need to download movies or stream....just be able download attachements at a reasonable speed.
When in doubt, hold on to your altitude. No-one has ever collided with the sky.
 
airliner371
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:03 pm

If airlines like DL got rid of AVOD I bet their usage rates would sky rocket.
 
flyinryan99
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:06 pm

What about pre-paying for the service? I would think if it were offered when you check-in, just like bags or other fees, it may increase usage. I am usually on it when I fly and most of my flights are 1 to 2 hours. I dunno if I would pay $20 for two hours of usage...I don't mind paying the $9.95 though. That's just me.
 
joeljack
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:13 pm

If I could buy a subscription for $100/ year I would do it, right now at current prices, no thanks!! Too expensive.
 
roseflyer
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:15 pm

If they could get the speed and bandwith high enough to stream video, then I think they’d have plenty of takers. However light internet browsing and email is not worth the cost.
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LAXintl
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:15 pm

A couple notes on the pricing.

Due to poor earning returns with the flat rate pricing for flights, Go-Go in conjunction with the airlines have opted to try more dynamic pricing.

On several carriers the pricing is now based on historical usage stats, flight distance, time of day, actual number of people signed on, etc. So yes that Virgin America flight that historically had high usage will now cost $30+.

Quoting FWAERJ (Reply 6):
If B6 launches free Wi-Fi as planned

B6 stated it plans to offer the service free for the first 30-aircraft. Once the roll out becomes more fleetwide, there would be a charge.

Quoting FWAERJ (Reply 6):
or if WN offers free Wi-Fi with Row44

I've not heard any mention of this.

Quoting catiii (Reply 8):
As someone who is a Go-Go user, I can tell you that the novelty has worn off because their technology cannot keep up with my technology.

Yes and this only adds to the conundrum.

It cost lost of money to move to faster or higher bandwidth technologies. For instance Go-Go in addition to its ground base network is getting into the satellite business also. Certainly not cheap investments, they need to recoup somehow.

Quoting CompensateMe (Reply 10):
Apparently Gogo's trialing an elimination of the day passes with a flat, $10/hour fee.

For now 24-hour day passes, are still avail for purchase before your flight for as low as $12.70.
From the desert to the sea, to all of Southern California
 
ytib
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:21 pm

Quoting flyinryan99 (Reply 15):
What about pre-paying for the service? I would think if it were offered when you check-in, just like bags or other fees, it may increase usage. I am usually on it when I fly and most of my flights are 1 to 2 hours. I dunno if I would pay $20 for two hours of usage...I don't mind paying the $9.95 though. That's just me.

That could work if all of the aircraft in a fleet had wifi. As this is not the case, a last minute swap of aircraft causes issues.
 
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:24 pm

Quoting airliner371 (Reply 14):
If airlines like DL got rid of AVOD I bet their usage rates would sky rocket.

Maybe...The question is - is it cheaper in fuel savings that the commensurate weight savings over traditional IFE savings? I personally think its a black hole of money for the airlines. I've used it a couple of times on DL/UA/AA, but I found the service so spotty that it wasn't worth the price of admission. I honestly prefer the regular overhead monitor, PTV, book/magazine, or sleep.
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lhcvg
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:25 pm

Quoting LHUSA (Reply 2):
From what I understand, Gogo sets the prices, not UA

I think the only way to get really broad adoption would be for airlines to comp customers, similar to how UA will pay for your PreCheck screening if you are an elite.

Quoting flyinryan99 (Reply 15):
What about pre-paying for the service? I would think if it were offered when you check-in, just like bags or other fees, it may increase usage. I am usually on it when I fly and most of my flights are 1 to 2 hours. I dunno if I would pay $20 for two hours of usage...I don't mind paying the $9.95 though. That's just me.

Personally I think that's a great option they need to explore. Surely FF's would be more interested if they could get a discount of some kind for frequent usage - buy a month's worth for the price of 20 days (roughly business days), all day for the price of say 5 hours, etc.
 
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:28 pm

Quoting airliner371 (Reply 14):
If airlines like DL got rid of AVOD I bet their usage rates would sky rocket.

I seriously doubt it. Even on non-AVOD aircraft the usage isn't that great. I don't know why so many users are advocating for DL to remove AVOD from its fleet, thus alienating many loyal DL FFs.
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flyinryan99
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:36 pm

Quoting ytib (Reply 19):

That could work if all of the aircraft in a fleet had wifi. As this is not the case, a last minute swap of aircraft causes issues.

Understandable...but have a pre-purchase option and if it doesn't get used on the flight, the card never gets charged...Authorized prior but not actually charged until it's used... Just a thought  
 
LAXintl
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:38 pm

Quoting LHCVG (Reply 21):
Surely FF's would be more interested if they could get a discount of some kind for frequent usage - buy a month's worth for the price of 20 days (roughly business days), all day for the price of say 5 hours, etc.

It already exist --

You can buy a monthly pass -- $34.95 for a single airline, of $39.95 across all go-go equipped flights.

Row44 does not offer such pricing yet, but SWA for now maintains a more affordable flat $5/day rate.
From the desert to the sea, to all of Southern California
 
lhcvg
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:41 pm

Quoting LAXintl (Reply 24):

Nice! That actually isn't too bad. Having never had the need myself, I never did much digging into their prices. But thanks for the info!
 
chrisair
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 5:58 pm

I'm glad more people aren't using it--this means more bandwidth for me and people who use the service to get work done. I've been a $34.95 all airline monthly pass subscriber since Alaska started offering it--I'm still at their lower rate--and I'm glad I have it every time I fly.

Quoting LHCVG (Reply 21):
similar to how UA will pay for your PreCheck screening if you are an elite.

You mean Global Entry (which then can be used for PreCheck).
 
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gdg9
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 6:22 pm

Quoting chrisair (Reply 26):
Quoting LHCVG (Reply 21):
similar to how UA will pay for your PreCheck screening if you are an elite.

You mean Global Entry (which then can be used for PreCheck).

Not necessarily. I signed up in May, sent in my stuff and was never reimbursed. I called the other day and they sent me a credit card number to use as if I was just signing up, despite me explaining that I was looking for the $100 reimbursement as a Prem. Platinum. No dice.
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glbltrvlr
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 6:28 pm

Quoting kgaiflyer (Reply 11):
On my last WN flight, screen changes on their $5 Wifi were getting to 30 seconds.

That was my experience as well about two weeks ago on a 4 HR WN flight:

Southwest (Row 44) Wifi Experience
 
jetblueguy22
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 6:29 pm

I think they just have to focus on business users more. My folks for example do a ton of business travel but they don't want to pay for the wifi because the company won't comp them. But they can use iPass to hop on for no addition fee. When my stepfather found out he could use it I swear every flight he logs on. But his one big complaint is just the speed. Not saying you have to have 100MBps speeds but at least make it so that it isn't a hassle to download a small attachment. I love using GoGo when I fly but sometimes it just doesn't justify the 12.95 to pay when I can just wait 2 hours and use the hotel's internet.
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DocLightning
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 6:32 pm

Quoting STT757 (Reply 1):
UA wanted $17.95 for gogo on my PS flight from JFK to SFO. No thanks.

This is the crux of the issue. The prices are too high. Charging by the day is just a turn-off to customers.

I've shelled out $12 on VX for WiFi on SAN-SFO, but that was really a one-time thing to check out the novelty. I certainly wouldn't pay that kind of money for WiFi on such a short flight.

If they could bring their prices down to $5 for up to 90 minute scheduled flights, $10 for up to 3 hours, $15 for 3+, I bet they would get a lot more business.
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traindoc
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 6:37 pm

There are some folks who always want to/need to be connected to the internet. My guess is that 5% would be about right. For the rest of us, do we need to or want to be connected while in the air? Many people (myself included) are glad to be DISCONNECTED while in the air.
 
glbltrvlr
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 6:40 pm

Quoting DocLightning (Reply 30):
The prices are too high.

Unfortunately, that's not what they teach B-school these days. Your list price is set very high so you can segment the market. There will always be some willing to pay what looks to be outrageous prices because they can pass the cost on or the work accomplished really can stand the pricing. The rest of your market you hit with with targeted discounts, contract rates, etc. Same principle used for airfare pricing. As much as it annoys me, the days of flat rate pricing for everyone are long gone.

[Edited 2012-09-24 11:46:15]
 
MaverickM11
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 6:44 pm

Quoting DocLightning (Reply 30):
This is the crux of the issue. The prices are too high

Anything > free will be too high. It's just another amenity pax say they want but aren't willing to pay for, certainly not in any way that would sustain it.
E pur si muove -Galileo
 
BD338
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 7:01 pm

Quoting kgaiflyer (Reply 11):
Quoting catiii (Reply 8):
I can tell you that the novelty has worn off because their technology cannot keep up with my technology. For example, they don't have the bandwith to stream Netflix, HBO Go, etc. Additionally, as noted below, the value isn't there for the price they're charging now.

And it seems the more folks who tune in, the slower it gets. On my last WN flight, screen changes on their $5 Wifi were getting to 30 seconds. People watching the $6 Wifi-TV weren't doing much better.

On my last couple of WN flights I've seen a pop-up when trying to log on stating that they don't support high bandwidth uses such as video streaming, VOIP etc. (which didn't stop the guy in front of me trying a VOIP call only to find his connection and the background noise in the aircraft meant his call couldn't be heard - if that is a pre-cursor to the day when cellphone calls are allowed inflight, then that was an example of why that day should never occur) However, I digress...on topic: I generally only use the WN service as I am A List Preferred and it is a free perk, if I had to pay for it I doubt I would use it. My flights are generally under 1.5 hours, the speed is slow and seemingly getting slower even logging on can take several minutes, the connection drops frequently and the flight attendants seem to have a thing about wanting all electronic devices turned off the moment the captain announces the initial descent even though we are at 35,000 feet and 30 minutes from landing. In other words, not worth it. If I was on DL etc. where it might cost be $15-20 for the service on the same duration flight then definitely not worth it. I don't need to be that much in contact and my clients know I fly, in meetings and generally have items that mean I am not instantly availble 24/7 but will call back once I get a message.

As a consumer group we have become accustomed to the notion that Internet = Free. News is free, Facebook is free, shipping is free, most US based purchases are sales tax free (for the time being), Wi-Fi in Starbucks is free etc. So when it comes to being asked to pay for wi-fi it seems a lot of people are having a hard time with it. I'm not sure how much longer the ad-based "free" option will exist, seems to be doubts in some areas that the ads really work (see GM on facebook for example) and the model may have to shift. The airlines may be at the forefront of that change, the question is, are they too far ahead of the curve and the service will fail before it does become the accepted norm.
 
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DocLightning
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 7:33 pm

Quoting glbltrvlr (Reply 32):
Unfortunately, that's not what they teach B-school these days.

Wait, they don't teach that if you set a luxury item's price too high, it won't sell?
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airbazar
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 7:38 pm

Paying for Internet access is just wrong when every McDonalds's, every coffee shop, or highway rest stop has it for free. I would never pay for it on a short haul flight and the numbers say I'm not alone. Internet access is an ammenity like having a toilet or soap to wash your hands. If airlines think they will make money off of it they are delusional.
 
lhcvg
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 7:43 pm

Quoting gdg9 (Reply 27):
Not necessarily. I signed up in May, sent in my stuff and was never reimbursed. I called the other day and they sent me a credit card number to use as if I was just signing up, despite me explaining that I was looking for the $100 reimbursement as a Prem. Platinum. No dice.

Figures smisek et al. would try to avoid reimbursing your expenses for that!

Quoting airbazar (Reply 36):

In their defense though, doing internet on an airplane is much more expensive than $100 at most for a decent router to use at a McDonald's, Starbuck's, etc.
 
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 7:45 pm

Quoting DocLightning (Reply 30):
If they could bring their prices down to $5 for up to 90 minute scheduled flights, $10 for up to 3 hours, $15 for 3+, I bet they would get a lot more business.

Early on this was the case, but that pricing model was tossed out in favor of the current one. They offered pricing based on flight time as well as a 24 hour pass, a one week pass and a monthly pass. Now it's 24 hours, monthly or annual ($399 a year is a dang good bargain if you're flying a couple of times a month.). I wonder if these changes were done so that some additional bandwidth opens up since some customers would be less likely to buy it at $12 regardless of the flight length. Unless you're on a 4-5 hour transcon, it's just not worth it when you think of the cost per hour. Delta has been bundling prepaid GoGo access with priority boarding which saves a few bucks than if bought separately.

I've used it on a few flights and do recall at times being the only person using it and one of those trips was during a holiday period in which Google, eBay, PayPal, and several other companies were sponsoring free WiFi on GoGo equipped a/c. I've got a trip coming up in about two weeks and I still haven't decided if I may make use of it on my flight. I would be more likely to use it on a 3-4 hour if the pricing was a bit lower.
 
toobz
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 7:47 pm

I love wifi when flying. I am one of those that doesn't like to pay for it. Paid for it only 4 times ever. I wonder how DY is able to offer it for free?
 
Viscount724
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 7:53 pm

Quoting LAXintl (Thread starter):
Now with almost 1/3 of US airliner fleet featuring onboard wi-fi capability, only a small fraction of passengers pay for it leading to growing financial loss.

It was the same problem with Airphones. A lot of money was spent installing them but they were very rarely used due to high costs, and more money then had to be spent to remove them.
 
LAXintl
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 7:54 pm

Quoting airbazar (Reply 36):
Paying for Internet access is just wrong when every McDonalds's, every coffee shop, or highway rest stop has it for free. I would never pay for it on a short haul flight and the numbers say I'm not alone. Internet access is an ammenity like having a toilet or soap to wash your hands. If airlines think they will make money off of it they are delusional.

If its wrong, they how are companies like Row44, or Go-Go even going to exist ?

They have invested north of a billion in infrastructure and service, and need to recoup that investment.

Personally, I don't in anyway believe Wi-Fi access is a God given right. Like cell phone service, you want it, pay for it.


Ultimately I'm not convinced inflight Wi-Fi is a viable business at the moment however.
Personally a more viable item would be inflight cell phone use. As seen overseas such has a higher uptake rate on airlines that offer it.
From the desert to the sea, to all of Southern California
 
catiii
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 8:04 pm

Quoting airbazar (Reply 36):
Paying for Internet access is just wrong when every McDonalds's, every coffee shop, or highway rest stop has it for free.

Or $14.95 per day at some Starwood hotels, which is ridiculous to me.

Quoting LAXintl (Reply 41):

If its wrong, they how are companies like Row44, or Go-Go even going to exist ?

JetBlue is able to offer it for free I believe?
 
airliner371
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 8:06 pm

Quoting catiii (Reply 42):
JetBlue is able to offer it for free I believe?

They will offer it free until 30 planes have Wifi then charge something (we don't know how much).
 
LAXintl
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 8:15 pm

Quoting catiii (Reply 42):
JetBlue is able to offer it for free I believe?

First JetBlue is only doing it temporarily. They said its only free till they have 30 aircraft equipped.

Secondly JetBlue owns LiveTV. Unfortunately the earnings of LiveTV are not clearly broken out, however they have good revenue sources from other airlines, so they can likely temporarily cross subsidize anything they offer for free at B6.


At the end, other airlines are free to offer it free as well, however the provider still needs to earn its revenue. So unless airlines are willing to cut multi $100million checks to folks like Row44 or Go-Go, the end user will have to pay it.

Quoting catiii (Reply 42):
Or $14.95 per day at some Starwood hotels, which is ridiculous to me.

And the muffin in room service might cost $12. If its too much, then then don't pay for it.
Its a convenience feature they offer.
From the desert to the sea, to all of Southern California
 
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enilria
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 8:16 pm

Quoting LAXintl (Thread starter):
Its estimated that a 20% usage rate represents break-even point for the industry.
Quoting STT757 (Reply 1):
UA wanted $17.95 for gogo on my PS flight from JFK to SFO. No thanks.

So, lets assume this plane has 150 passengers on average. If break-even is 20%, that's 30 people paying $17.95 which is $539. If this was a 5.5 hour flight on a 757 that means a 6 year co-pilot makes $96/hour in pay or $528.

So, providing WIFI to the plane costs as much as one of the two pilots?????

If the flight takes 5.5 hours and the plane flies this route roundtrip every day that means that this plane is paying "Comcast" $400,000 per year for internet service??


REALLY? Don't believe it. Sorry, this is all just B.S. to justfiy the ridiculous prices. If it really costs that much to provide the service then it won't be popular until they figure out how to lower the cost...

BTW, imagine the same calculation for a hotel. I bet they are at 40% use. Let's say it's a 200 room hotel charging $12.95 per day. 200x12.95x.4=$10,360 x 365 days per year = $3,800,000. If they are paying over $200 per month for a T1 line I'd be shocked. Profit margin 158,300%.

[Edited 2012-09-24 13:22:50]
 
cargolex
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 8:19 pm

Quoting STT757 (Reply 1):
UA wanted $17.95 for gogo on my PS flight from JFK to SFO. No thanks.

On AS, the same service is, I think, $12.95. I use it virtually every time so I don't pay per flight anymore.

Quoting MaverickM11 (Reply 12):
Prices have run the range from pennies to sky high rates, and people aren't buying at any price.

I am! I love having wifi. It's much more useful than having a TV with several crap movies I don't want to see and reruns of 2+1/2 men, or worse - a TV that doesn't work and it stuck on for the entire flight (which has happened to me twice on CO/UA 739s), or nothing at all (happened last month on another CO/UA 737). Fortunately I had stuff to read on that trip.

I almost always fly AS for domestic travel and I think all but three or four of the fleet are GoGo equipped now. I never have to worry about an equipment swap.

On the other hand, most of my flights are tracon. If I fly from SEA to PDX or SFO, I'm not going to bother with it, because it isn't worth purchasing for such a short flight.

Quoting airbazar (Reply 36):
Paying for Internet access is just wrong when every McDonalds's, every coffee shop, or highway rest stop has it for free. I would never pay for it on a short haul flight and the numbers say I'm not alone. Internet access is an ammenity like having a toilet or soap to wash your hands. If airlines think they will make money off of it they are delusional.

I strongly disagree.

A coffee shop or a McDonald's doesn't have to also provide safe carriage at mach .84 at 34,000 feet.

Similarly, the airline needs to provide a restroom. We did not have the internet when we all flew 727-200s everywhere and we do not specifically "need" it now the way you "need" a bathroom.

Internet access on an airplane in flight is an amenity - it is exactly like in-flight entertainment, and some people, myself include, use it for IFE. In my opinion, it's exactly the sort of thing that an airline can and should charge for - whether they sell it a-la-cart like Alaska does with GoGo or whether they factor it into a ticket price to provide a higher level of service overall.

Quoting Viscount724 (Reply 40):

It was the same problem with Airphones. A lot of money was spent installing them but they were very rarely used due to high costs, and more money then had to be spent to remove them.

I don't feel that the Airphone was analogous.

The Airphone was astronomically expensive, and most people had little or no motivation to use it. What is so important that it cannot wait until you get to the end of the flight that it's worth paying that much to call about? Furthermore, using the airphone in any kind of private way was impossible, so it would be hard to discuss anything sensitive - like business information - while on one. Then the were was the aspect of irritating the travelers around you, which was another strike against the airphone. The Airphone would only have worked in the context of something like the Concorde - where people might actually be willing to spend for that phone call because they need to be somewhere urgently.

Wifi has none of those downsides. You aren't generally talking when you use it, it allows you to do work other than just talking on the phone, and it is an alternative to IFE.

It's still expensive for what it is, but I've used GoGo many times and I don't think I'd have ever picked up an Airphone under anything but the most dire of circumstances.
 
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enilria
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 8:25 pm

Quoting Cargolex (Reply 46):
In my opinion, it's exactly the sort of thing that an airline can and should charge for

I'm fine with them charging for it, just don't tell us some B.S. about how they need $500 per flight in revenue or they are losing money. That's apologist garbage.
 
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 8:37 pm

Turkish Airlines provides wifi for free. Usage is over 40%.

And I know which airline to pick when going home as well  
Airports 2012: IXE HYD DEL BLR BOM CCU KNU KTM BKK SIN ICN LAX BUR SFO PHX IAH ORD EWR PHL PVD BOS FRA MUC IST
 
lhcvg
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RE: US Airlines: We Have Wi-Fi, But Few Pax Pay To Use

Mon Sep 24, 2012 8:42 pm

Quoting enilria (Reply 47):
I'm fine with them charging for it, just don't tell us some B.S. about how they need $500 per flight in revenue or they are losing money. That's apologist garbage.

True that! Just market it as catering to a captive market justifying a markup. At least they'd be honest then.