How airlines get it wrong with inflight internet

By danwarne, May 2 2011
How airlines get it wrong with inflight internet

When Boeing built a billion dollar global inflight internet service called Connexion in 2001, right in the height of the "dot com" bubble, it was hailed as the future of business travel -- a live connection to the ground, at affordable rates, no matter where in the world's skies a traveller was.

Five years later, the board of Boeing cut its losses and shut the service down, citing poor takeup from passengers, and saying the continued cash burn simply couldn't be justified.

Fast-forward another five years to the present day, and inflight internet is once again becoming available in aircraft cabins around the world -- though predominantly in the United States.

If Boeing's Connexion service died an early death because it was ahead of its time, today's inflight internet certainly isn't.

Travellers are now used to having always-on web access and email on smartphones, and most travellers carry a laptop, tablet or internet enabled smartphone with them now.

Virgin Blue chief John Borghetti says Australians are crying out for inflight internet: "They are ready for it, especially on longer sector journeys," he told Australian Business Traveller.

However, despite this, takeup of inflight Wi-Fi is disappointingly low, according to US airline analysts.

As few as one in 20 passengers take up inflight internet, according to analyst In-Stat.

Forrester Research puts it slightly higher, at 7 to 12 per cent.

However, with more than 2,000 planes in the sky now equipped with inflight internet, and a $100,000 per plane upfront cost for an airline to fit it, the $200 million spent so far on equipping planes is going to take a long time to pay back.

So what are airlines doing wrong in their marketing of the service?

It seems obvious that making it an additional-cost service on the plane puts up a barrier to taking it up. Having to take out a credit card and type it in to a signup page will make many travellers question whether they really need the service at that time -- much as having to put in credit card details before making a phone call would.

If airlines can offer fares with and without baggage, why not also add fares with Wi-Fi built in by default, with the option for passengers to select "lite" fares without inflight internet access during the booking stage?

It goes without saying that as the point of business and first class fares is full service, the cost of Wi-Fi access should always be built into those fares.

It's not like someone is going to choose one airline over another because of an additional $25 fee on a business class fare -- but the automatic availability of free internet access throughout the flight would be a powerful differentiator for an airline wanting to grow their business customers.

Finally, it's obvious that airlines know that free Wi-Fi internet access in lounges is a basic expectation.

Why not make a year's access to inflight internet part of the paid lounge membership -- for example, Qantas Club -- and an optional add-on for 'free' lounge members such as gold and platinum flyers.

Having to pay for it only once a year, and possibly as a salary sacrificeable benefit, would make it a much easier sell to business customers.

Selling in-flight internet as yet another fee that passengers have to stump up each time they fly is a stodgy way of marketing it that is doomed to failure. It's time airlines thought more creatively.

Over 10 years ago  people opened internet cafes - best known was easyCafe in Oxford Street  - and charged for access, but internet cafes have never made any real money and with smart phones will die out completely.  So why do airlines think that putting "internet cafes" onboard will make them money now?  Of course there will be a few people who NEED to use the internet onboard and a few who really want it, but the majority i suspect are happy to wait until they are back on the ground rather than pay.  Maybe it will go the way of Hotels: some have in-room access free and others charge often a lot, has it been a great money spinner for hotels, i havent heard it being talked about as a goldmine.  Maybe Boeing was right....

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