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
    STupid Terrorists, 30 Aug 2006 @ 1:40pm

    More STupid Terrorists

    Has anyone forgot the fact that they stopped people brining on anything electronic? God-for-bid! She has a nail-file!!!! She might file away the window and crash the plane!

    If I am going to pay for at ticket which includes a broadband price in it, as someone suggested above, I want to be sure I can bring 50 laptops along and download a ton of movies to sell so I can make back the money I wasted on 1st class...

    PS: I only have one laptop and WoW IS engrossing...

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