Flying at the Speed of the Internet

Staying connected while flying has become automatic. Smart phones, laptops and tablets are must-pack items. However, connectivity isn’t a guarantee on all flights. According to a Wall Street Journal survey of the nation’s 12 biggest airlines, less than 60 percent of commercial passenger aircraft in the U.S. are connected (and this doesn’t include commuter jets). This fall, Gogo, the largest inflight Internet provider in the U.S., unveiled a system that connects airplanes to the Web six times as fast as its current best option. Airline companies are quibbling about whether providing Wi-Fi service to passengers is a good investment. At this time, those airlines that do provide Wi-Fi have various ways of covering their expenses: some charge a flat fee or charge for streaming but not basic Internet. Gogo determines pricing for onboard Wi-Fi, with options including $14 one-day passes and $50 monthly passes. It’s up to the airlines to choose whether to pass along the costs to the customers or use the availability of the service as a selling point in attracting more people to fly their airlines because Wi-Fi is free or at least available.

The latest data from USTravel.org, shows that Americans logged 2 billion “person trips” in one year for leisure and business (* Person-trip is defined as one person on a trip away from home overnight in paid accommodations or on a day or overnight.) Read on to find out why an informal survey of frequent fliers shows that Wi-Fi availability, though it’s a luxury now, may soon become indispensable and de rigueur.

I am the CEO of a regional airline in the Midwestern United States, Lakeshore Express. We’ve found that the question of onboard Wi-Fi access has most to do with flight duration. For a flight 90 minutes or less, customers place a very low priority on onboard Internet access. Instead, they place a very high premium on Wi-Fi access at the terminal itself. Few passengers, according to our market research, would be willing to pay more for a flight (a short flight) if it allowed access to on board Wi-Fi. Instead they would rather the airline focus on reliability and on-time performance. This is true for both business and leisure travelers. I am also struck by the DOT statistic regarding leisure travelers. This information must be reviewed in regards to the market itself. For example, most travel between major cities is for business not leisure. In Chicago for example, there are more business travelers going between Chicago, Detroit, Minneapolis, and Milwaukee as compared to leisure travelers. It also should be noted that as compared to leisure travelers, business travelers are significantly more likely to fly, as opposed to drive.

Greg Stallkamp
www.lakeshoreexpress.com

I travel quite a bit, both for business and pleasure. Since I own my own company, even on a pleasure flight I tend to be working. The speed of the existing Internet connections is not an issue for me- when there is inflight Internet access, it is as fast as I need it to be. Since I don’t watch movies or work on large graphic files, my business tends to involve reading research, reading newspapers, answering emails, and looking at spreadsheets.

I do have two problems with inflight Internet:

1) It is still not available on many U.S. domestic flights and

2) It is not available on a majority of U.S. carrier’s international flights.

It is exceedingly frustrating that the very longest flights are the least likely to have Internet. On my most recent flights to Korea and Europe I endured 13 hours and 8 hours respectively with no Internet. In a revenue sharing arrangement, there is no reason why airlines should not be able to have inflight Internet. The same goes for commuter trains and subways…all should have Wi-Fi and perhaps even cell service.

Donald B. Cummings, Jr.
Managing Partner
Blue Haven Capital LLC
www.bluehavencapital.com

My agency, Comunicano, works with emerging tech companies. Currently, I’m the New Tech correspondent for KFWB Radio’s “Business Rockstars in Los Angeles.” Last year I flew 122,000 air miles and visited 13 countries on business. And almost every domestic flight I chose had Wi-Fi. If I have the option of two flights on the same airline departing five minutes apart going to the same city, I will choose the Wi-Fi labeled flight. It’s important for the airlines, from a marketing and customer benefits perspective, to understand my reasons.

1. Email stress relief. The best benefit is the feeling that I haven’t missed any email or other messages while traveling. I used to fly red eyes to the East Coast to avoid losing the whole day of work. Wi-Fi on the plane means I can know what’s going on, act on things, but most of all, when I land, I don’t have to sift through over one hundred and fifty emails to find the important and actionable items. That means I arrive far more relaxed and can address real business issues.

2. Staying in touch–using a variety of messaging tools like Skype and Yammer with my team on the ground (we’re totally virtual, across four time zones) means questions get answered in real time, and clients stay happy.

Now as to what it means to the airlines: For starters we’re quickly evolving into a society of connectedness. For example, right now I’m on a train from Sydney to the Hunter Valley, using a MiFi that’s connected via Gigsky’s SIM. The train lacks Wi-Fi but my device lets me keep working on a three hour plus ride into the wine country.

As we move more into the era of the Internet of Things (IoT) a lot more monitoring, advisories and options will be presented to us while we’re mobile. This is all an extension of the mobile society we live in, and our younger generation only knows. They simply are not used to NOT BEING CONNECTED to their friends and associates. For an airline it is an amenity to offer, but one that will rapidly become an essential need. Already Southwest offers free Wi-Fi to their A List fliers, as a feature perk, as does United. Lufthansa is making noise about their in-flight Wi-Fi on long haul international flights as part of their upgraded business class, as they know there is a need for the business traveler to get work done. There is also the entertainment value for children, because they get to play games and watch edutainment. This certainly helps keep them calmer. Wi-Fi for an airline is no longer a value add. I regularly choose to fly Virgin America on the same routes as SouthWest or United because I’m guaranteed Wi-Fi. They have it, it works, and my monthly subscription to GoGo means I’m online in a flash, and not losing time with a sign-on and pay process the way I do with Southwest and United (I’m not a status flyer with them any longer). Lastly, the frequent business traveler wants convenience. As more people carry iPads, more will want to use them. Having Wi-Fi on planes and trains makes that possible.

Andy Abramson
aabramson@comunicano.com

I am a business traveler, and I’d like to make two key points:

(1) Most business travelers can expense their in-air Wi-Fi expense, and it is a relatively small expense, so the price sensitivity is probably low.

(2) Most airlines are not practicing any kind of arbitrage in their pricing, and could probably extract greater revenues if they offered people different tiers of service (such as different speeds for different prices).

(3) The portion of business travelers is not the determining factor. What matters is whether enough people will pay to justify the investment. For example, most travelers do not fly first class, but offering first class service is worth the cost on many flights. Not all flights, but many flights.

Chris Boudreaux
SocialMediaGovernance.com

As a business traveler and as a father I see the value in increasing access and speeds of Internet connections on flights. When I travel, I use the in-flight Internet option pretty much any time it is available. Unfortunately, so many flights still do not offer any Internet connectivity. So the first priority should be to get every flight Internet enabled. Second, they need to improve the reliability. I’ve had flights where the connection is very spotty and it was unavailable for long periods of the flight. It is not worth spending the time to fight with GoGo to get the refund, but that I’ve found that the infrequent availability kills my productivity.

There are a few reasons for increasing Wi-Fi speed:

1) As more and more people use the in-flight Wi-Fi, more users will be consuming the bandwidth. If they don’t upgrade the inflight Wi-Fi speeds, then everyone will find the network slowing to a crawl.

2) To enable rich communication applications, you need more reliable and faster connections to enable VoIP and/or Video conversations

3) There is clear demand for streaming applications so that you can catch up on the latest episode of “Breaking Bad,” “Game of Thrones,” etc… from your smartphone or tablet

MICHAEL FREEMAN
Sr. Manager, Search & Analytics
www.shoretel.com

I’m a CEO of an mobile app/service startup, YouMail, and I travel on business regularly (over 100k miles/year). Wi-Fi is hugely helpful, but not critical. There are two key things it provides:

1) Not having delays when a team member needs an answer for me.

2) Making it easy to fill out blog posts/presentations with content found online.

Alex Quilici
www.youmail.com

Just a few years ago it was still possible and acceptable to be disconnected while traveling. However, the expectation in business today, especially in the start-up realm, is that you are available at all times. Travel time is no longer an excuse to take a break, even while in the air.

Since (my company) Dental Departures is responsible for customers and staff on a global scale, fast and reliable online access is essential. Regardless of how many time zones I travel through each month, in-flight high-speed Internet access allows me to attend regular meetings with my executive team, reach out to our client network, and solve real-time problems that could slow our progression as a company.

One of the first things our travel coordinator considers when choosing an airline is whether online accessibility is available. Since we have video meetings via Skype and Google, it is extremely important that the connection is reliable and as fast as possible. The speed of the connection may eventually be the difference between our company choosing one carrier over another.

While the statistics may say that only a quarter of all airline passengers are traveling for business, it would not surprise me if the majority of those regular business travelers ended up on the airline that offered the highest speed Internet access in the near future.

Paul McTaggart
CEO of Dental Departures
www.dentaldepartures.com

As a small business owner, I travel for business frequently. So, I must stay productive, even when flying on an airplane. Airlines must improve in-flight Internet speed if they want to remain competitive. I have flown many airlines in the past, but I now try to avoid airlines that have had numerous Internet issues in the past, most notably Southwest Airlines. Even though only one quarter of airline passengers are traveling for business, you will likely see this number increase as the economy improves and as it becomes more and more global. Also, the U.S. Travel Association recently did a study that showed the more money a company invests in business travel, the more profits improve. The savvy small business owner will definitely take advantage of flying time to get things done and stay productive, and the airlines that can deliver faster Internet speeds will certainly benefit from that.

Andrew Schrage
Founder and CEO at Money Crashers

I fly frequently for business … Honestly, I don’t think speed is the biggest concern for me: the main thing I would be concerned with is consistency of service. Often I have purchased in-flight Internet only to find that it fails halfway through the flight, or upon boarding I am informed the in-flight Internet service is not working. From Honolulu to the Continental U.S. I have no service at all over the water, which is an inconvenience.

Typically as a manager and software engineer, when I am online the time-sensitive tasks I am working on online are sending emails, reviewing and emailing documents, or updating status in our issue tracking systems. All of these tasks do not require much speed – however they are time sensitive, and if I cannot get to them in the air, this will delay my team for a few hours until I can finally get online

Sid Savara

While I travel a good deal for business, I also travel a lot for leisure with my family. When travelling for business, I find that transit times to and from airports can be bothersome due to the time wasted, but once you’re in flight, entertainment is usually plentiful and I personally use the downtime to unwind and disconnect.

On the other hand, when travelling with family, I find the need to connect during long haul flights is greater: kids love to stream movies, to play games that require an Internet connection and we need to be able to divert our minds from the madness that can be a 10-hour flight with 4 kids!

Farhad Divecha
Director
AccuraCast
www.accuracast.com

I am the co-founder of a tech start up called TheSquareFoot. When I fly (about twice a month – half for business and half for personal), I ALWAYS look for Wi-Fi (and its speed). I think my generation and the generations below will demand it. It allows for everything from streaming media to being able to work. I would tell you most of my contemporaries feel the same.

Aron Susman
Co-Founder, TheSquareFoot
www.thesquarefoot.com

A decision flowchart illustrates how we at LexVolo (a next-generation aviation consultancy) believe airlines evaluate product development decisions (based on observations and on what we know of airline decision-making).

In a nutshell, not all airline customers and products are the same to the airlines. It is true that “take rates” (the percentage of passengers who will use inflight Wi-Fi) declines as the price goes up, or as length of the flight decreases. What matters to airlines is who uses it: are they high-fare customers, and will offering the product affect their choice of carriers?

Airlines clearly are betting that their most valuable customers do or will demand inflight Wi-Fi. A survey last week indicated that 32% of travelers indicated lack of Wi-Fi was worse than sitting next to a crying baby.

The bottom line is it’s less relevant whether or not Wi-Fi makes money directly; it is more relevant whether the high fare business travelers airlines covet will cover the price of entry for airlines. The early returns indicate either that it is, or that it will soon be.

Edward Shelswell-White
Principal
www.LexVolo.com