Virgin Australia is rethinking its approach to inflight WiFi

The return of WiFi is a matter of ‘when’ rather than ‘if’, says Virgin Australia's CEO, but expect some changes...

By David Flynn, June 1 2021
Virgin Australia is rethinking its approach to inflight WiFi

Virgin Australia says it plans to bring back inflight WiFi, but with some differences to the previous system which travellers experienced before the airline hit the OFF switch prior to its collapse in April 2020.

That setup, which the airline launched in April 2017 – the same month as rival Qantas – offered a combination of free and paid access, compared to Qantas' approach of the Internet being fast and free for every passenger.

The basic WiFi connection was earmarked as "suitable for lightweight Web browsing, email and social media at around 1Mbps", the airline said at the time, although many travellers noted free speeds in the vicinity of 10Mbps.

For $12, passengers could reserve a fast connection for what the airline described as "higher-bandwidth applications such as video streaming and downloading large files or attachments."

However, Virgin Australia CEO Jayne Hrdlicka isn't convinced this is the way to go forward.

Virgin initially opted for a combination of free and paid WiFi on domestic flights.
Virgin initially opted for a combination of free and paid WiFi on domestic flights.

"WiFi is on the cards (but) the WiFi product that we had before, we didn't think was serving our guests as well as it might," Hrdlicka told Executive Traveller on the sidelines of last week's launch of the partnership between Velocity and 7-Eleven.

"So we're working our way through what the best alternatives look like, the best way to think through WiFi and how important it is to our guests."

One option, which would be in keeping with Virgin's new 'value' proposition, might be to scrap the free WiFi tier and charge passengers (although perhaps making an exception for business class flyers) to jump online – on the basis that if they don't want WiFi, then it doesn't need to be priced into their fare.

Another would be to dial back the free service to cover only messaging apps – such as WeChat, WhatsApp and Facebook Messenger, along with the chat programs of Apple and Android devices – in line with several overseas carriers, among them Virgin's US partner Delta Air Lines.

Virgin could also resume the previous tiered plan but impose much stricter speed limiting on the free service.

For Hrdlicka, the past six months since she replaced Paul Scurrah as CEO have been a juggling, ordering and re-ordering of priorities, especially in response to the shifting sands of border closures and the rise of new underdog challenger Rex.

Much of the airline's primary focus has been on rebuilding its domestic network and reopening airport lounges, and rebooting business class with a new meal service – which Hrdlicka says has met with a "very positive" response from premium travellers.

But WiFi remains on the to-do list, especially given that Rex is understood to be trialling WiFi for its own fleet of ex-Virgin Boeing 737 jets ahead of a rumoured launch this month, while Qantas continues to let passengers stay connected above the clouds.

Also read: Virgin ponders Velocity VIP tier for 'super Platinum' frequent flyers

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

20 Oct 2015

Total posts 224

I get that VA has had a lot on its plate but this is another area I find it hard to fathom as to why WiFi hasn't been sorted yet, with all the experts and number-crunchers at Bain. I suspect what we will see will be either free 'messaging', which is very low bandwidth, and a paid 'full access' package, or just make WiFi paid, full stop. As the article says, this is supposed to be what Virgin is all about now, value, so if you want WiFi you pay for it, just like paying for food and drinks in economy.

Virgin Australia - Velocity Rewards

29 Oct 2014

Total posts 4

it can be number-crunched any which way but the business model for Wi-Fi inflight doesn't add up. at best under a paid model airlines are getting a 6% take-up rate. For the top tier airlines who get the hardware for free and the service providers recoup the cost through data until it is repaid, this is fine but for airlines like Virgin who have to pay for hardware then in most cases pre-purchase on a data plan, it not feasible. The free Wi-Fi model still only gets a 50% take-up rate at best on airlines so offering this and selling advertising space still doesn't get the ROI to pay for the data. given that satellite internet, data rates are still extremely high per MB and the $500,000 per year of fuel burn due to carrying the 6-foot antenna on top of the aircraft, it is a huge cost to an airline. 

I like the idea of a free 'messaging-only' tier, very popular with US airlines and gets customers one step closer to upgrading to full paid Internet access.

IMHO, Virgin should also make full Internet access free for business class passengers, maybe offer a few one-hour vouchers per membership year to Velocity Platinums and Golds, and also consider a monthly 'flight pass' where you get unlimited access for the whole month. Gogo used to offer these in the US, several of their airlines had them, and you can see how they'd appeal to business travellers.

Also, maybe offer WiFi as something you can buy during the booking process before you fly, at a lower price than on board, the same way you can often pre-pay for additional checked luggage and it's cheaper than paying at the airport.

08 Aug 2012

Total posts 14

Given the system wasn't installed on all the B737 aircraft I'm not sure there would be much value in a monthly subscription or a pre-purchase at time of booking given you don't know what aircraft you end up on.  

05 Mar 2015

Total posts 361

I understood that the Boeing 737s which Virgin decided to keep were the ones with WiFi fitted, the older jets and those which didn't have WiFi were sent back to the lessors.

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 308

Bain has kept the 2 737-700s AFAIK.  The older (non-BSI config) 738s were either returned to lessors (with some off to REX) or if they were mortgaged (was owned) they were disposed to the banks alongside the 77Ws.

Lmc
Lmc

Qantas - Qantas Frequent Flyer

09 Nov 2018

Total posts 100

Very Happy with fast & free (included) on Qantas for all passengers. The value proposition on Qantas is now well above all other airlines in Australia, for what has been very competitive fares.

05 Mar 2015

Total posts 361

Exactly, this is one of the areas where Qantas can actually claim to be fully-inclusive, although economy 'meals' can be hit and miss. It's still good to see Qantas drop its fares on 'Rex routes' even though they are not matching Rex and Virgin because they don't have to, but if you're willing to pay that Qantas premium then you get better lounges, fast free WiFi, sometimes economy meals, basically a better product all around. As long as that premium isn't too high then I think it's good for the market to have choice like this. What'll really be interesting is how Rex handles WiFi, I can't imagine it will be free, so it could be another area where Rex and Virgin adopt a similar strategy.

hardly. Why would you pay qantas fares, when Rex fares as low as $39 & at peak hour ? If you don't fly Rex fares will increase.

05 Mar 2015

Total posts 361

I don't want to turn this discussion about VA WiFi into "Qantas vs Rex" but if the price difference isn't that much then the reasons I gave above are reasons to why somebody might want to fly Qantas. Just to recap, look at Melbourne-Canberra. Yes, prices were very high before Rex announced its launch, as mentioned in this article: https://www.executivetraveller.com/news/rex-qantas-virgin-melbourne-canberra-price-war

Qantas was $218 and Virgin was $185, then the day Rex announced it would start with fares from $69, Virgin dropped theirs to match while Qantas dropped theirs to $99.

So we're talking $69 one-way for Rex vs $99 one-way for Qantas. There are still a lot of companies for whom Qantas is the preferred airline but even so, I would rather pay the extra $30 for Qantas on this route because I can earn points and status credits which are important to me, as QFF Platinum I can use the very good Qantas business lounges at MEL and CBR which are 100x better than the Rex equivalents, I can also do checkin and manage my booking on the Qantas app for convenience, I can use WiFi on the flight if I need to, and my QFF Platinum status also gives free seat selection and access to some of the better seats up the front, and I also get a more generous checked luggage allowance if I need that as well. That's a lot of extra value for me for just $30!

You might not value those things, and that's fair enough, but every traveller has different things they value and they make their travel choice accordingly. The only thing I'd agree with you on is that if people don't fly Rex then Rex will go and fares will increase. But that's the free market, I still prefer to fly Qantas for the reasons outlined above, and I'm going to take advantage of any lower QF fares caused by competition.

XWu
XWu

09 May 2020

Total posts 508

Not sure who says what but basically QF included or offers complimentary WIFI in their service.

What VA is trying to do is decide if it’s going to be same for their service.

No one expects the airlines get their WIFI service for free, there is always costs beyond just owning the equipment to relay the internet service, hence its a matter of whether the airlines charges for the services by including it as part of price, or pay per user.

I don’t think anyone would say QF include “free meals”; its simply just included in the service for the fares.

All these talk about VA trying to decide whether and what kind of WIFI Is provided “for free” is really an issue about whether VA wants to include WIFI as a complimentary service or not, just like their tea and water. Even the original VA (Mk I) brochure announcing the WIFI service calls this complimentary rather than free.

What is certain is any airline will pass on the cost of their “complimentary” services to their pax, it’s a matter of how much the pax notice that difference In fares.

Let’s stop calling them free as if the airlines are doing us a favour not appearing to charge additional out of pocket for even the proposed basic messaging wifi service 

05 Mar 2015

Total posts 361

"I don’t think anyone would say QF include “free meals”; its simply just included in the service for the fares."

Well pretty much every passenger would call it a free meal because they're not paying for it. The airlines might say "complimentary" instead of "free" for meals, WiFi etc but I think we're splitting hairs over the use of language. You are of course very correct in saying what's "free" to the passenger comes at a cost to the airline, and that's very much the case with WiFi, which is why  I expect Virgin will reduce that cost as much as it can.

05 Mar 2015

Total posts 361

So here's an interesting data point from a mate who works in the telco industry and knows about the costs of the satellite services like those which Qantas and Virgin use. He says that on a per aircraft basis the cost of having WiFi available would be over $50k per month. That's per aircraft, and it covers just having the connection between the plane and the satellite and the ground stations available, even if nobody is using it. The deals have a flat fee of this 'channel' being open as well as for a certain amount of data being consumed by passengers.

Virgin of course was able to exit all supplier contracts when it went into and then came out of administration, so Bain has probably been able to cut a much better deal with Optus and Gogo, who were the original partners for the satellite and for managing the service. But even at say $25k per plane per month, with 50 planes in the fleet Bain's looking at $1.25m per month. No wonder they are not rushing back into WiFi!

Virgin Australia - Velocity Rewards

24 Jan 2018

Total posts 527

Not sure about others reading here, but business colleagues within my 'sphere of influence' are of almost the same view and myself, namely, that on Mel-SYD and BNE-MEL sectors, none of us 'need' WiFi for business purposes because we're all able to do go silent for 60-90 minutes.  Only on longer flight to Perth, NZ, SG and HK is WiFi needed.  Interestingly to me, almost all agree that on longer sector flights (LAX, LHR, etc.) WiFi not 'necessary'.  

My take: there's the WiFi needed for 'business' purposes, and then there's the WiFi preferred for it's R&R value.  I think, this time, Virgin/Bain have been smart to pause and consider carefully.  

09 Aug 2015

Total posts 92

Really interesting to see all these views here. I don't want WiFi on domestic flights if it means the fare is more expensive, I'd rather pay a 'basic' fare and then pay extra for WiFi if I want it. I could see the appeal of a free 'messaging' service, as so many people have that for smartphones these days and it can come in very handy. But I don't think Virgin will lose anything by not giving away free WiFi like Qantas does. Virgin needs to keep doing its own thing and doing what makes sense for it, not copying Qantas like the former CEO used to do.


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