updated 01:30 am EDT, Fri March 23, 2012
Passengers more willing to pay for productivity
The percentage of passengers willing to pay between $5 and $13 for Internet access on flights has doubled in a little over a year to more than eight percent, and is expected to hit 10 percent by the end of the year, research firm In-Stat reports. On some flights -- particularly between technology-oriented cities such as San Francisco and Boston -- the rate can climb to more than a quarter of all passengers, says The Wall Street Journal.
Though the number of people paying for Wi-Fi access on flights is increasing, most passengers still think the service is overpriced, In-Stat adds. The average "value" of in-flight Wi-Fi was perceived to be between $2 and $5 per session, creating a "value perception" gap, according to senior analyst Amy Cravens.
While more than 1,700 planes in the US have Internet access available, more are being added, including US Airways, which has announced it will cover 90 percent of its fleet with Wi-Fi by the end of next year. Prices vary by airline, but those that use GoGo in-flight internet pay $5 for flight durations of 90 minutes or less, and $10 for up to three hours. Day passes and monthly passes are also available, but better deals exist -- including from Southwest Airlines, one of the few airlines that directly controls its Internet access pricing.
Southwest currently offers a $5 flat rate during flights, but does not yet have its entire fleet covered. The airline plans to offer further discounts in exchange for advertising revenue from businesses who will promote places of interest in the destination city, since they have a literally "captive" audience.
Delta offers free Wi-Fi for first-class passengers, seeing it as an amenity to attract more top-rate paying flyers. It also offers a few free sites for passengers in other classes, including Amazon and Delta's own site. The airline says Internet use on longer flights has nearly tripled over the past two years.
In-Stat also found that downloading books, checking into social services and tracking their own flight are the most common uses of in-flight Wi-Fi. Many passengers, despite grumbling about the price, find that Wi-Fi enables the time spent in the air to pass by more quickly, and business travellers see the service as an increasingly-vital way to stay in touch and productive while flying.
Virgin Airways has experienced one of the fastest rates of growth in Internet access on its fleet, with the airline as a whole averaging 16 percent participation on any given flight. The airline credits on-board hot spots and standard power plugs for passengers to charge their equipment as part of the reason for its higher-than-average rate.
Though GoGo's ground-station-based Internet service has been the most commonly-installed system with airlines, the company says it is moving to a satellite-based system over the next few years that will finally enable it to offer Internet access on flights outside the US, as well as offer faster speeds and greater bandwidth to accommodate the increasing growth. Currently, GoGo's speed tops out at 3.1Mbps. The company plans to finance the expansion through a public stock offering sometime this year. [via Source]