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7/24/2008
04:35 PM
Richard Martin
Richard Martin
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Will In-Flight Web Access Save The Airline Industry?

This will almost certainly go down as the worst year in the history of the U.S. airline industry. Buffeted by high fuel costs, the airlines are canceling flights -- and losing money -- in record numbers. But there's a glimmer of hope in providing in-flight Web access to passengers.

This will almost certainly go down as the worst year in the history of the U.S. airline industry. Buffeted by high fuel costs, the airlines are canceling flights -- and losing money -- in record numbers. But there's a glimmer of hope in providing in-flight Web access to passengers.The technology for telecommunications at 30,000 feet has long been available, and it's improving rapidly. Now several big U.S. airlines are trialing onboard Wi-Fi systems, and say they'll begin offering service on limited flights as early as the fall. Using infrastructure from business aviation telecoms leader Aircell, American Airlines says it will begin offering a service called "GoGo" to passengers flying between New York's JFK airport and California (Los Angeles and San Francisco), plus one flight per day between JFK and Miami, by the end of this month.

"Southwest Airlines, Alaska Airlines, Virgin America, and Jet Blue also have limited tests or projects under way," reports Computerworld's Matt Hamblen.

The American service will cost between $9.95 and $12.95 per flight, depending on the time aloft. That's comparable to what travelers currently pay for a day's usage in a big U.S. airport, although many airports, including Denver International, have begun offering complimentary ad-supported Web surfing.

Long delayed because of bad business decisions and the general turmoil surrounding the airline industry, in-flight access has the potential to be a lifeline for struggling carriers. For one thing it's a high-margin business: once the equipment is installed and lit up, each additional passenger paying 10 bucks a flight costs only pennies to service. (High up-front capital costs and passenger pricing helped doom Boeing's ballyhooed Connexion in-flight service.)

Even more important than the new revenue stream is the potential to calm, or at least keep occupied, increasingly antagonized passengers who now have to pay for basic services like in-flight beverages and checking bags. Even if only a small percentage of passengers opt to pay for the service, they're apt to be high-frequency business travelers who make up a big portion of airline revenue. The ability to get work done and e-mail answered during delays and downtime will go a long way toward soothing impatient customers -- and airlines that do a good job of providing the service will quickly find it a competitive advantage.

"It's the No. 1 demanded in-flight service," Doug Backelin, manager of in-flight communications and technology at American, told MSNBC.com travel writer Rob Lovitt. "It's not just surfing the Web. It's communication, it's movies, it's a way to keep kids from kicking the back of the seat in front of them."

Not coincidentally, Itasca, Ill.-based Aircell recently closed investments by Goldman Sachs and Credit Suisse, bringing its total equity funding to $265 million.

Onboard Web access will quickly raise some interesting questions about etiquette and social behavior among dozens of passengers crammed into slender metal tubes six miles above Earth. Will harried execs working online be less tolerant than ever of screaming babies? How will the airlines provide power to the increased number of laptops and smartphones in use? (American already provides a limited number of electrical outlets on certain planes.) What if the guy next to your 8-year-old is viewing Maxim.com?

And, the $64,000 question, will passengers now begin demanding in-flight voice service? Though legal in Europe, cell phones are banned on commercial airlines in the United States even though no interference with cockpit telecommunications has ever been proven. Recently a Texas man refused to get off his cell phone on a flight into Dallas, because he was speaking with physicians tending to his dying father. He was ticketed for disorderly conduct upon arrival. That is likely the leading edge of a wave of new dilemmas brought on by the new era of in-flight telecommunications.

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