Fast Wifi is JetBlue’s Secret Advantage

For years, I was frustrated by JetBlue’s failure to follow others and put wifi on its airplanes. What took so long? Well, after a false start, the effort didn’t begin until the airline felt it could provide a superior product. It seemed like JetBlue was losing out, but what never quite hit me until a panel discussion at the Phoenix Aviation Symposium earlier this month is just how powerful that advantage now is for JetBlue. It can do things that others can’t, and customers don’t have to pay a dime.

JetBlue Fast Wifi

When wifi became a big deal, the default was to install Gogo’s air-to-ground system. It was easy and quick to install, which was important. Plus, Gogo was aggressive with pricing and made it easy for airlines to commit. Today we have Gogo on the domestic fleets of Alaska, American, Delta, and Virgin America (United has it on some airplanes) with varying levels of speed but none overly impressive.

JetBlue, meanwhile, messed around with some pretty awful ideas. Anyone remember BetaBlue? That was JetBlue’s attempt to provide a free service, but it was useless for anything but email. That failed miserably, and JetBlue looked at other options. While the airline refused to commit, other airlines were aggressively rolling out Gogo. At the time, it seemed like an insurmountable lead.

As time went on, people started using inflight internet more and more. Gogo quickly ran into a capacity problem. Part of the solution was to offer upgraded systems, but those didn’t alleviate the problem entirely. The quick fix was out of Econ 101: raise the prices to reduce demand. And that’s a lot of what we see today. On my Virgin America flight from Boston to LA recently, I couldn’t believe wifi on that flight was running $39.95. A day pass was $49.95. That’s incredibly high, but it does the job and squashes demand.

Now, Gogo is pitching satellite-based systems which are promising but aren’t simple to install. It takes a big commitment to go down that road. And it takes time. Now JetBlue finds itself in a much better position.

The airline has somewhat quietly installed its fast satellite-based wifi system on more than 80 percent of its Airbus fleet. That will be done soon, and the Embraers will follow. This system is really fast, and so far, JetBlue is offering it for free. (You can pay for an even faster version if you want.)

It seemed to me that this was just another cost that JetBlue would absorb as part of its product offering, but that’s far from the case. JetBlue is actually finding that having fast wifi is a huge advantage.

At the Phoenix Aviation Symposium, one of my favorite conferences, Marty St George, EVP – Commercial and Planning at the airline, made an obvious point that I had completely missed.

Just because [wifi is] free to customers doesn’t mean it’s free. We’re recovering our broadband costs and more with partnerships. If I’m on a product that doesn’t have the bandwidth, I can’t do partnerships. We feel very very excited about the product.

Those partnerships are working. It showed promise earlier this year when JetBlue announced a content partnership with The Wall Street Journal. But that was nothing compared to the recent announcement of a partnership between JetBlue and Amazon.

If you’re an Amazon Prime member and you fly JetBlue, you’ll be able to watch all your Prime videos or listen to Prime music for free, just as you would at home. People who aren’t Prime members will be able to purchase content to stream through Amazon. And undoubtedly, Amazon is paying a pretty penny for this privilege. JetBlue makes money (or at least breaks even), travelers get a tremendous experience, and Amazon presumably converts a lot of travelers into heavier users of the service. That’s fantastic for everyone… except for those airlines who can’t offer the same thing.

Bandwidth has been such an issue that airlines with Gogo have jumped at the opportunity to provide cached content to traveler on an onboard server. You can stream what the airline keeps on that box, but you can’t pick from the infinite universe that it Amazon. And much of that canned content is going to cost you to watch. That’s not the case on JetBlue.

You can see how this becomes such a powerful advantage for JetBlue, especially since competitors are unable to match for now. There are likely all kinds of online services that would be interested in taking a chunk out of their marketing budgets to spend them on airplanes, but it requires the ability to stream. If Amazon sees value, that’s a very good sign that there is real value there.

While JetBlue was slow to get wifi onboard, it has now built quite the formidable advantage. And it’s going to take years for others to catch up.

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26 Responses to Fast Wifi is JetBlue’s Secret Advantage

  1. Brian says:

    How does the technology JetBlue is using compare to the row44 satellite based solution that Southwest has? I’m pretty certain that SWA’s service doesn’t have the speed / bandwidth that JetBlue has but are they similar tech?

    • Bob says:

      Row44 in of itself could be as competitive and effective, but WN has hampered their own deployment in three ways: (1) it uses HughesNet’s (yes, the rural residential satellite company) service, (2) WN doesn’t buy enough bandwidth capacity in total as compared to other airlines deploying satellite Internet access and (3) WN has this INCREDIBLY ANNOYING and buggy Java-based web page banner that messes with many sites and SSL VPNs.

      Gizmodo posted a pretty good review of competing solutions 4 days ago here: http://www.airlinereporter.com/2015/05/in-flight-weefee-so-complicated-very-satellites-much-dollars-wow/

    • Brian – The use different satellite technology and providers. As mentioned, Southwest uses Row44, and that’s a solution that uses Ku Band. JetBlue is with Thales (which bought LiveTV) and that uses Ka Band. In theory it should be easier to get higher speeds from Ka band, but Ku can do it as well. As Bob mentioned, Southwest doesn’t buy enough capacity to justify speeds anywhere near what JetBlue is providing. That’s not to say it couldn’t, but it would be costly.

  2. Joe says:

    How does this stack up against Row 44 at Southwest?

  3. A says:

    I used to pay for a monthly Gogo membership but let it drop because the bandwidth was basically only good for email and some moderate web surfing. Even downloading large attachments while in-flight was a process. The value just wasn’t there so I’d pre-plan and have some work to do offline while in the air.

    The JetBlue system sounds interesting and I applaud them for keeping the cost buried in the ticket price…for now. I have ancillary fee fatigue big time and even if I can expense it things would be much easier if just included with the flight. Now if only Jet Blue would fly to MSP I could check them out. One can hope…maybe if SY closes up shop??

  4. Sean S. says:

    This partnership idea is the better way to go. With the exception of a handful of business travelers that need to be connected all the time, there is absolutely no incentive to pay double the membership fee’s of streaming services to, you know, watch streaming services on the go. I’ll be interested to see if Netflix partners with anyone.

    • See, the fun thing is Netflix doesn’t need to partner with Jetblue. From what Jetblue has said it’ll work just fine with their service… (although perhaps only have the user has paid.)

      • Nick -Yeah, for streaming, I believe it requires the higher bandwidth connection that JetBlue charges for. With the Amazon deal, travelers won’t have to pay to get the higher bandwidth connection to use Prime services.

  5. BigDaddyJ says:

    I think you’re way overstating JetBlue’s advantage here. Technology moves fast. As it stands, Gogo already has deployed an upgraded version of their air-to-ground network, ATG-4, which airlines have been rapidly installing; e.g., Virgin already upgraded all of their planes. http://www.frequentbusinesstraveler.com/2014/12/virgin-america-hits-milestone-in-gogo-wi-fi-upgrade/ provides 3x the bandwidth, which IME makes it very useable for business purposes (the most important application).

    Meanwhile, I’m *really* curious how the Prime system will scale. Even satellite bandwidth is far, far from unlimited. I’d be shocked if they have more than 100Mbps for the entire plane, which might handle 40-50 streams at the most. Gogo’s next system will be pretty competitive (~60Mbps).

    Finally, Amazon’s partnership is interesting, but do you really expect consumers to choose an airline because of it? I doubt it, personally. Most people prefer built-in IFE content, either to their tablet or to the setback screen, or WiFi for the purposes of work.

    • Brian says:

      JetBlue has repeatedly promised 12Mbps per passenger, and some A321s are configured for 190 passengers.

      • BigDaddyJ says:

        Thanks, Brian, but there’s probably some marketing in there. The math (12*190) would imply a 2.2Gbps network connection. That’s totally infeasible, given what little I know of satellites. Of course, it’s not the same as when the airplane is much higher in the sky, but let’s say they *had* 2Gbps both ways (to the satellite from the plane, and from the satellite to a fixed ground operation for the uplink). To pay for that uplink, across JetBlue’s entire fleet (~150 Airbus A320 and A321, making this 300Gbps) to the rest of the Internet would be utterly cost prohibitive for them.

        So, they must be talking about a likely-model based on actual use, compression, and other trickery.

        • BigDaddyJ says:

          Well, in fairness: I should wait to see JetBlue’s pricing plans before saying it’s cost prohibitive. I still really doubt the 12Mbps per seat for *every* seat, though.

        • BigDaddyJ says:

          Wow, I’m _not_ on a roll. I see JetBlue has updated their Fly-Fi page to specify $9 an hour for full streaming, which is pretty expensive. That goes a long way towards explaining how JetBlue can guarantee 12Mbps for those users. :)

          Impressive! Curious to see how the economics work out for Amazon; of all Internet companies, they’re most likely to loss lead if necessary.

    • BigDaddyJ – Yes Gogo has ATG-4 but that still has plenty of limitations. And there won’t be streaming. That’s why Gogo is rolling out a satellite service even for domestic operations. But to put that on the aircraft requires a new antenna and a lot of out-of-service time. It would take years for an airline to switch.

      As to your broader question, I think you’re missing the point. Whether Amazon sponsors this or not doesn’t make someone choose an airline. But the point is that these kind of sponsorships make fast internet free for people onboard. Airlines early-on saw that onboard internet was going to matter. Even notoriously-stingy US Airways jumped to install it and put ATG-4 onboard. So fast internet does make a difference. And if it’s free, it just helps build the brand halo that keeps people coming back.

      • BigDaddyJ says:

        Thanks, Cranky; I think I did miss the point in your article.

        Yes, “sponsored Internet” is possibly a significant development, and it’s a nice advantage for JetBlue, but I still think the jury is out on whether it’ll make a measurable difference for them. Until we see substantive other partnerships, I think it’ll mostly be a counter to their lackluster IFE service (good TV but lack of on-demand movies). If there’s, e.g. free social networks, then you’d be talking, but I still do think that is counter-able even with ATG-4.

        The main question, which is interesting, is if you think it’ll be enough to counter the shrinking legroom and elimination of the free checked bag. I hear anguish from a lot of passengers over that investor-driven decision.

        • CF says:

          BigDaddyJ – I don’t put any stock in this talk about JetBlue ruining its product. JetBlue already has the new product on its A321s today and the survey scores are far better than the A320. Keep in mind that the new seats JetBlue is installing still have 33 inch pitch and more legroom than the previous seats because they’re slimline. Comfort is supposed to be great, though I haven’t been on the A321 yet. As for bags, good. I don’t often check bags so I’d rather stop subsidizing others. But you can tell that JetBlue is putting a lot of thought into how this is being done. I have a feeling that it will be implemented in a smart way. But we have to wait until it actually happens.

          Also, I don’t see how ATG-4 can counter this because it isn’t capable of streaming.

  6. Ed K. says:

    I confess I do not own a company which requires constant WiFi service. So, this is irrelevant to me and many others. We can wait until the plane lands and we can access our e-mails for a modest fee anywhere in the world. WIFI is not a deal breaker for many us.

    • Ed C says:

      Try telling that to many of the younger generation — they need to be connected 24×7 via facebook, twitter, etc. It’s actually pretty sad … especially when you go to Disney World and see 3/4 of the park glued to their smartphones or tablets.

  7. syvjeff says:

    I think it’s interesting as Moore’s law continues its march forward with technology and how this discussion will change let’s say in 10 years. I thought it was stupid that people would watch TV on their phones when I first heard about the concept 10 years ago. 5 years ago while on a “camping” family vacation I caught my wife catching up on her favorite TV show on her iPhone.

    It’s great that technology will follow us on to flights. In fact I would rather see WiFi on a flight than have a stupid AVOD box blocking my foot well while cramming my 5’8” 155lbs frame into a coach seat.

    For me, call me old school, I like the quiet time of not being able to be reached.

  8. Cook says:

    Some industries call it Shake Out. Take a second look in 4-5 years: JB will still be a leader, but not THE leader and I suspect that FREE will be but a pleasant memory. Band width will continue to grow and we’ll see about the price point(s).

  9. Stephen says:

    I have flown both the A321 and the A320 with JetBlue. I am an overweight person with back issues. I have to say that I cannot tell the difference in pitch between the two aircraft even with the A321 having 1 less inch of pitch. Also on the A320 seats, I get back pain within 1 hour of flying. On the A321, I have never had any back pain which should speak something about the seat, at least to me it does.

    I have used and enjoy the free wifi on Jetblue and works just fine when I’m crusing FB or messaging friends and family I have even watched short youtube videos but have never tried streaming a movie or tv show. I think that most people will be pleasently suprised when the A321 EMS and Core cabin comes to the A320 fleet.

  10. What a great bit of news. If JetBlue is covering my destination, I may consider using them, just for the advantage of the Wifi. This sounds like a great breakthrough and I cannot wait for other airlines to get on board.

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