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 @ 10:57am

    Its supposed to be about competition...but...

    If the airlines realized that having broadband available on every flight would GREATLY increase the chances of business travelers choosing that airline, then it would come down to giving that airline a competitive edge.

    Its NOT a money maker. Its a loss leader to steal customers from the competition. Thats all it could possibly be. I would NEVER spend 20$ to have 2 hours of broadband under the most uncomfortable seating arrangement imaginable. But I WOULD choose a different airline if I knew I would be able to at least get some WoW (or second life for you second lifers..) time in during the flight. that would at least make it more bearable.

    But all of that is irrelevant anyways. The way security is going at airports nowadays, its a burden to bring a laptop. Hell, its a burden to travel period. Instead, I video conference, and then go home and play WoW there. It doesn't work for everything, but it certainly works for most things.

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