As I mentioned in my post last night, I was able to take a ride on a beautiful Grumman Albatross owned by Row 44, the company that is just beginning to ramp up its satellite-based wifi service. What was even more incredible is that I sat in the bubble nose for departure and took some amazing video (see below).. But it wasn’t all just fun – there was plenty of talk about onboard wifi choices as well. It proved to be a very interesting discussion.
Earlier in the day, Southwest CEO Gary Kelly and Continental CEO (for now) Larry Kellner were on an airline CEO panel at NBTA (at left). I also had the chance to speak with Gary later on. Both times, the topic of wifi came up. I wondered why Southwest had chosen the satellite-based system from Row 44 when their flights could all have been handled by AirCell’s ground-based network in the US.
The reason that really struck me was that Southwest has more control with Row 44. See, AirCell brands their service as GoGo and they set the pricing and keep the branding their own. With Row 44, Southwest keeps the branding and they get to set pricing and determine how revenues will work. Everything I’ve heard is that Row 44 is more costly, but it appears that Southwest finds that worthwhile because of the extra control they have.
At the end of the day, I stopped at the Southwest booth when someone recognized me from my Halloween judging in Dallas. Next thing I know, I’m being invited to go for a ride with Row 44 on N44HQ, a Grumman Albatross built in 1951 and previously used for search and rescue as well as astronaut training. Done deal.
Even though it was a seaplane, we were flying from San Diego’s Lindbergh Field thanks to problems with getting permission from the locals to operate on water. That was too bad, but we still had an incredible time.
The nosecone isn’t a nosecone at all but rather a clear bubble for surveillance from the airplane’s previous life. As we hopped on board, I grabbed a seat until being told that I could ride up front. I snuck in underneath the pilot’s seat and found myself laying on an old blanket with my head on a pillow in the nose. Yes, I stayed there for takeoff and took this video.
When we came back to earth, the sun was setting and I had a chance to talk with Row 44 CEO John Guidon. He echoed much of what I already discussed with Gary Kelly, but he also threw out some figures. He said that on average, about a third of people onboard have wifi-enabled devices with them. When the service is free, he said that most people just log right on. But when a fee is added (any fee, no matter how small), only about a quarter to a third of people with devices log on for longer flights. That’s only about 8 to 11% take rate.
This is why John hopes to see an ad-supported model in the long run where passengers don’t need to pay. I asked about the expensive cost of bandwidth, but he seemed confident that ads could still pay for this. Of course, that will be the airline’s decision as long as they go with Row 44.
Personally, I have to wonder about the financial viability of all this. There’s a lot of money going into this effort, and I have to wonder where these wifi companies are getting all this cash. If it’s debt, then it’s going to be tough to pay it all off. But ultimately it doesn’t matter for the customer. If a company goes bust, someone will buy the remains and get the thing started again.
To bad it wasn’t earlier in the day, would have been a nice view without the sun setting.
Have you ever been in a seaplane? I have in Alaska and it’s totally different then using a nice solid runway. Try it if you haven’t.
CF – Any talk about if each aircraft equipped with wifi will also have power outlets? Kind of limits utility of internet if the laptop/phone wont last long enough to keep the user placated, especially if a fee is charged.
David SFeastbay wrote:
Yep, I did it in Alaska as well. It was very cool, but that was on floats. This uses the hull in the water, so I imagine it would have been completely different. It’s too bad we couldn’t do it.
That is quickly becoming my pet peeve. No talk of power outlets. *sigh*
It looks like Southwest is the only airline that learned from the air-phone pricing fiasco. The market for telephone calls at $3.00 a minute was far less than they thought, and most have been removed from aircraft.
Jealous about the Albatross flight too! You go man!
On-board wi-fi is great, but I have a question about airport wi-fi: typically airports contract with a single provider to cover the entire airport with hot spots, which means you have to pay multiple providers if you connect through different airports. I’m sure that telecoms providers would be happy to offer competing services if airports allowed equal access for setting up wi-fi hot spots (the airport would still make money, by charging all providers equally). Any insight as to why airports are not required to allow competing providers to set up hot spots? They do allow access to competing pay phone and cellular phone providers.
What type of satellites / satellite provider does Row 44 use? Couldn’t find that info on their web site.
I imagine it’s an issue of dollars. They probably can make more by doing an exclusive deal, and until someone tells them to open it up, they won’t. (Why nobody has told them to open it up, I don’t know – seems like there are still competitors with things like cell networks.)
> If a company goes bust, someone will buy the remains and get the thing started again.
Didn’t quite happen with Connexion, now did it? ;)
I think they handle this like they do pay phone. Sure you can get any long distance provider at a pay phone but that long distance provider pays the pay phone provider for the call. In turn the pay-phone provider pays the airport.
I read an interview with an airport manager when wifi was going in and they wanted a cut of the wifi revenue, unlike when cell phone towers went in at airports they only got a monthly rental fee for the cell tower.
that being said those that need wifi on all sorts of networks would probably be best served by a wifi aggregator like Boingo.
If I were an airline I actually want my WiFi to be branded something unrelated to my airline. Why? Because if the WiFi craps out and its branded as SW-FI or something, its my airlines fault as far as the customer is concerned.
If the WiFi craps out and its branded as GoGo, its GoGo’s fault it’s GoGo’s fault as far as the customer is concerned.
The first problem with the take rate is that the Internet, for a lot of people most of the time, is a huge time waster. People likely don’t want to pay for the privilege of wasting time. If I could surf the net for free, I’d do it. But I’m not paying to read CF inflight, no offense ;)
The other problem with the take rate is *how* the plans are priced. No matter what, I’m not using the internet (in terms of KB transfer) for the entire flight. If I feel the only thing worth paying for is email access, I might pay, but if I’m only going to check my email once every hour or so, I don’t want to pay for continuous access.
To get a higher take rate, these things have to be priced low enough on a transactional basis so that passengers aren’t thinking twice about opening their wallet. Maybe those in charge will figure out some sort of market segmentation pricing plan — after all, you don’t want those who are willing to pay the higher price paying the lower price.
One last thought: What is throughput rate on those things? Is it fast enough to stream a movie? That might be the future of inflight entertainment AND inflight internet — pay per view movies.
Long time reader, just wanted to say that the quality of your articles keeps getting better and better. The photos are great, the video awesome and they are surrounded by excellent reporting and analysis. Bravo, you can almost smell the fear of the newspaper trade.
Have you ever thought about taping and editing any of your interviews. On the evidence of this video, I would definitely be interested in watching CrankyTV. Maybe a video podcast? ;-)
No, but Connexion had a bunch of problems. First of all, the equipment was incredibly heavy, so not enough airlines were interested in doing it. Also, the pricepoints were really high. It just didn’t have the critical mass to keep going whereas these programs will.
Row 44 tells me that they are currently doing 8 to 10 Mbps on Southwest and once modem technology gets better, they can go up to 30 Mbps. I don’t believe AirCell gets anywhere near those numbers. But they both can do streaming. Row 44 has said that they want to make it a content platform.
Thanks for the kind words, Alex. I could look at doing a video pod one of these days, but that takes a ton of effort. I’d probably have to charge for something like that to make it worthwhile, and I’m not sure there’s a lot of demand for that. But I’ll keep it in mind.
Aircell/Gogo and Delta are in patent litigation for this service. This could make users liable as well.
Aircell should have installed power at every seat. Wi-Fi uses battery fast. I only get about an hour on my lap top. Why pay for only an hour of use. I would not use them for that reason.
Cranky, is that 8 to 10 Mbps per user, or for the whole plane?
I’m not sure on that.
I bet it’s for the whole plane, so the per-user amount would depend on the number of people using it. I suppose that’s a reason to want to NOT have power outlets at every seat, so you have less competition for bandwidth (just bring extra batteries)…
That video was a cool idea but even through the filter of your camera and youtube I still felt I had to squint. I wish you’d just shot video off to one side or something rather than straight at the sun… does that pod go underwater when they land in the water? How awesome would that be to ride in (or at least video)???
Bill Ward wrote:
Yeah, sorry about that. I can’t imagine that the nose goes under water because that would probably sink the whole plane. You’ll definitely get a ton of spray though.
What happens to Row 44 when the Hughes based satellite technology is outdated in five years? Have you priced a satellite launch these days? I’m sure it’s pricey. Upgrades to their system for speed and bandwidth enhancements will be enormously costly. What’s it cost to change the network equipment on top of 100 or so cell towers throughout the US? Not nearly as much. Southwest may control the cost now, but they do not control the bandwidth ever. Simple economics does. Gogo will be much cheaper to upgrade and maintain than any satellite based system.
I’m not convinced that the battery issue is going to be a big deal. Yes, right now the majority of laptops are only going to get 3-4 hrs and probably 2-3 hrs with wireless turned on. However, laptops are coming onto the market with much, much better battery performance. I bought one a year ago that I can get 8hrs w wireless turned off, and about 5 with it on. I heard somewhere a 10hr battery/laptop combo was going to hit the market. 3-5 yrs I don’t think the concern of AC power will be as big, and definately not worth the costs by airlines to install such power options – especially for southwest or Alaska, which is doesn’t really have flights over 6hrs.
Wow tell me the make and model of your laptop. I checked all brands and 1 hour on Wi-Fi is about normal. I would like to check it out. I also asked about future batteries and none of the major brands are expecting a new magic battery to show up anytime soon.
The cost to upgrade from an obsolete system like Aircell/Gogo is on the airplane side.
If everyone is on Wi-Fi on your flight it will slow down just like any other Wi-Fi. I will take the faster satellite option anytime. It looks like I will be on Southwest for the next five years.
@ Test Install: