The Disconnect In Demand For In-Flight Broadband And Service Success

from the something-doesn't-match-up dept

Boeing's decision to shut down Connexion, its in-flight broadband service, wasn't too surprising, given the few carriers that had rolled out it. But in some sense, it was puzzling, because there's such an apparent interest in in-flight broadband -- something backed up by yet another survey about it. So, if interest is so high, why can't somebody make in-flight internet access work? Connexion has failed, Tenzing's big plans never took off, and Airfone's overly expensive and underwhelming services were never popular. The biggest problem is the tremendous cost of outfitting airlines with the equipment to make the systems work, with Connexion's costs reported to be up to $500,000 per plane. With the airline industry bouncing from one financial crisis to another, and the most successful carriers being those that can hold their costs down the best, this is a pretty insurmountable hurdle. The bigger problem is that the real demand for this service, in all likelihood, isn't as high as all these surveys and media stories would indicate -- or in a world of free WiFi hotspots, demand falls off the table once a fee is introduced. Interest in the services carries on, with several companies participating in a recent FCC auction to secure licenses for air-to-ground spectrum. It sounds like most of these companies will use different technology than Boeing's satellite-based system, which could help them lower costs, but the more fundamental question they've got to answer is whether the demand to pay for this sort of service actually exists. Airline JetBlue was one of the winners of that auction, and it could use free in-flight internet access in the same way it uses its in-flight TV: as a perk to encourage business. That could be a more workable model, but still, an expensive one.

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  1. identicon
    Anonymous Coward, 30 Aug 2006 @ 12:57pm

    i can understand the airlines dilemma. first they pay their eomploys a TON of money. pilots make a good 6 figures. and i'm sure flight attendants and the like also make a decent ammount for the little work they do (walk up the iles a few times..giving out half cans of pop, or selling bottles of liquor for 5 bucks....if i'm wrong, please say so)

    with that, the added cost of federal regulations...i.e. maintenance and the amazingly high cost of jet fuel. it's no wonder they cry that they aren't making money...it's true, because it all goes to opperation.

    now, the only real way to try an make the money is by making x% more per seat per flight. so a coach seat cost say...$.40 per mile. 400 bucks for a 1000 mile flight. they want to make as much of that back as possible. charge a buck per mile? no...but maybe 60 70 cents.....that'll get money back.

    now factor in broadband....up to 50 cents per mile...oops...getting closer to that buck a mile.

    i would love to use broadband on a plane...take away from that loud humming jet noise. except i have a BIG problem. i have no laptop. could i bring my desktop on the plane? that'd be fun. some realtime CS:S from 35000 ft. awesome.

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