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Summary:

Airlines are pushing hard to bring in-flight Wi-Fi to their customers, but there’s little evidence consumers are willing to spend much to be connected in the air. So perhaps airlines should be looking to advertisers to fund their services. In-flight Wi-Fi faces several challenges, from expensive […]

Airlines are pushing hard to bring in-flight Wi-Fi to their customers, but there’s little evidence consumers are willing to spend much to be connected in the air. So perhaps airlines should be looking to advertisers to fund their services. In-flight Wi-Fi faces several challenges, from expensive deployments to a general lack of passenger knowledge. But the biggest hurdle may be the proliferation of ad-funded Wi-Fi services on the ground, which is surely helping create a consumer mindset that wireless Internet access should be free.

Aircell, an Illinois-based startup, now offers its ground-to-air Wi-Fi service on 623 aircraft through partners including American Airlines, Delta, United and Air Canada. The company said its business is nearing 100,000 users per week and is on track to surpass the 2 million-user mark in January.

That sounds impressive, but it’s a tiny fraction of the number of users who fly every month. More than 65 million passengers took to the skies in the U.S. in August alone, according to the latest figures from the U.S. Department of Transportation. Also, Aircell’s data refers to sessions, not unique users, and the company doesn’t disclose paid sessions vs. free promotional sessions, as Wi-Fi Net News reported last week. Portfolio.com recently illustrated how those free promotional offerings are easily available as airlines try to entice passengers to try in-flight Wi-Fi for the first time.

Meanwhile, rival startup Row 44 has installed its system on only five planes — four Southwest Airline jets and one from Alaska Airlines — and, like Aircell, isn’t sharing usage data. Southwest has committed to rolling out the service on its entire fleet of 540 jets early next year. But whether Row 44 can raise the $125 million or so that will be necessary to fill Southwest’s order is far from certain, as Portfolio.com notes.

Air travelers are an especially affluent lot, as a JiWire study showed last week, making them an attractive target for Wi-Fi marketing. Perhaps if airlines can’t convince passengers to shell out for access, they can find ad partners to fund their services.

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  1. The first issues airlines should fix for this to work are:

    1. Seat pitch, so you can consider opening your laptop without adopting weird poses.

    2. Laptop power ports, so you can arrive with your work done AND your laptop’s battery fresh, in many cases you need the battery to work at the place you’re going to.

    3. Spread the cost on all tickets and offer it as a free service. Doing some quick math, we have 400k sessions per month, let’s assume they are all paid minimum single-flight $5.95 passes, we have $2.4m. If we assumed all 65m passengers had in-flight WiFi access and paid for it on their ticket, their ticket purchase price would increase by 3 cents. I’ll try to come up with better figures on a post on my blog soon, should be interesting…

  2. I like the inflight wifi, but it’s pricy. I like the idea of having it added to the ticket and just offering it free but if that is not possible, how about a prepaid card / account and gett ing dinged per minute or hour. this would better allow me to control how I use my time. On the way to the client meeting, I can get stuff done and on the way home, I could choose to simply watch a movie, saving time for the next trip.

    This would be a more useful solution for those whose travel is not as frequent or whose schedules vary as mine does.

    Here’s hoping.

    P.S. Ads suck!

  3. Can Ads Help In-Flight Wi-Fi Take Off? – r&d hub Monday, November 23, 2009

    [...] more on gigaom.com [...]

  4. This is the third article I’ve read that has the same fundamental error. Row 44 does not need to raise the $125m referenced in the article, because the airlines themselves make the capital investment in the equipment. Anybody following Row 44 should know this, and also know of Row 44’s relentless commitment to capital efficiency and low operational expenses, which is designed to ultimately allow the very lowest costs to the users. In my view, this efficiency is Row 44’s best competitive weapon.

  5. Passengers will jump at the opportunity for ad supported wifi. Wifi is not a benefit, it’s an expectation and I suspect that airlines will make a lot more money from advertising to most passengers rather than enticing a few passengers to pay for the wifi that they expect to have for free. Personally I prefer to fly out of Oakland rather than San Francisco because I know that the wifi is ad supported and free to me rather than taking the time to log in and pay $10+ for a few minutes of access.

    Free wifi for passengers can’t come soon enough and ad support is perfectly acceptable to us.

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