• October 1, 2007
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Something Special in the Air

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On Aug. 1, American Airlines announced it would provide wireless broadband to passengers starting in early 2008. This makes American the latest in a long line of carriers, including Lufthansa, Qantas, Southwest, and Virgin, to announce such service. Users with Wi-Fi-enabled devices will be able to surf the Web, check email, and more -- all while airborne. "We understand that broadband connectivity is important to our business customers and others who want to use their PDAs and laptops for real-time, in-flight broadband communications," said Dan Garton, executive vice president of American Airlines, in a statement. "This is part of our continuing effort to take the lead in enhancing the travel experience for our customers and [to] meet their evolving needs." American's offering with mobile service provider AirCell will be air-to-ground and only available over the continental United States. But this is not the first attempt to provide broadband service to passengers. An earlier in-flight satellite service, Connexion by Boeing (CBB), was introduced in 2001 in partnership with American, Delta, and United. However, Boeing announced in an August 2006 statement that it was shutting CBB down because "the market for this service has not materialized." What a difference a year makes. "Long term, the new providers could develop the ability to support TV broadcasts via the Net -- Singapore had this when it was using Connexion," says Henry Harteveldt, Forrester Research vice president and principal analyst for travel research. "Depending on how extensive and fast airborne bandwidth is, airlines could replace their existing in-flight entertainment systems with Internet access and allow travelers to access their own entertainment." American has yet to announce firm pricing -- but that may become a deciding factor. At the time of CBB's demise, one writer opined on Ars Technica that CBB's price -- $30 per flight, or $10 per half hour -- was excessive and likely led to the service's demise. "In-flight Internet access is a feature that passengers value and will pay for," Harteveldt says. "[It] also creates two potential new revenue streams for airlines: They get to share in the subscription fee, and can 'narrowcast' advertising to high-flying surfers."
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