Most business travelers find that airplanes are dead zones for Internet service, as it’s available on a limited number of flights to Asia, but not on most domestic trips.
For good reason the cash-strapped U.S. airlines can’t afford it.
Santa Monica-based Boingo Wireless has staked its claim to this incipient market, as part of its larger plan to create a broad network of wireless “hotspots” across the United States.
In an agreement announced this month with Boeing Co. subsidiary Connexion by Boeing, Boingo will offer subscribers links into Boeing’s in-flight system.
Connexion by Boeing has been providing service on aircraft since 2000. But in five years, it has only signed up Lufthansa, SAS, Japan Airlines and Japan’s ANA primary long-haul carriers for a total of 20 airline routes.
Singapore Airlines, China Airlines, Korean Air and Aseana plan to start offering Connexion services later this year, and the company’s goal is to be on 400 routes by year-end. No American carriers have signed on.
“Our success in that area has been following the airline industry as a whole, and the Asia Pacific market recovered first,” said Stan Deal, vice president for commercial aviation at Connexion by Boeing.
Connexion requires the airline to shoulder the cost of installing a satellite antenna, along with a wireless node inside the cabin plus satellite downlinks. Connexion and the airlines share the revenues generated by customer usage.
Boingo would provide the service at an additional price to its $21.95 monthly subscription, or a one-time fee of $9.95 for 24 hours in one spot.
Boingo Chief Executive David Hagan declined to say how much it would cost to use Boingo on an airplane. (Customers using Connexion now pay between $14.95 and $29.95 per flight, depending on its length.) Boingo service on Connexion-equipped aircraft is scheduled to begin within three months.
Though Boingo describes itself as a wireless Internet service provider, it functions more as a billing network. The company has spent the past four years forging agreements with smaller wireless service providers that allow users to drift from one hotspot to another using the same account.
There are 88 partners within the Boingo network, which includes 4,000 hotels and 115 airports, and totals 16,000 hotspots.
Marilee McInnis, spokeswoman for Southwest Airlines, said the airline is always looking at new technology, but has no immediate plans for wireless “primarily because we haven’t found a product that respects our low-cost philosophy.”
She added that as a short-haul carrier, demand is lower.
Cai von Rumohr, analyst with SG Cowen & Co., said he doubts U.S. carriers will adopt WiFi anytime soon, but said Connexion’s success is not dependent on the U.S. airlines. The better market for such services, he said, is in business jets. “If a guy has a $35 million business jet, presumably he can afford to have this.”
The market has attracted another local company. Row 44 in Malibu has developed a low-profile satellite antenna that weighs a fraction of Connexion’s and is only about three inches tall, reducing drag and minimizing fuel costs. Row 44 plans to give the hardware to the airlines for free.
“Airlines don’t have a lot of cash,” said Chief Executive Jon Guidon. “We believe in this market, and we’re prepared to pay for the hardware in exchange for the revenue.”
