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Free Wi-Fi in Business and First Class – the Weekly Wish

by on July 17, 2014 · 20 comments

in Aer Lingus, American, British Airways, Delta, Emirates, Gogo Inflight Wifi, JetBlue, Lufthansa, TPG Contributors, United

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Today TPG Contributor Nick Ewen continues his series The Weekly Wish, looking at flaws, shortcomings, and room for improvement in the world of travel and loyalty programs.

There’s no doubt that we live in a connected world. With smartphones, tablets, laptops, and all the other ways we communicate, access, and share information, it’s oftentimes hard to go even five minutes without an active Internet connection. For a while, we had to endure this very thing on flights, though more and more airlines are now adding Wi-Fi to their planes. Unfortunately, internet access at 35,000 feet doesn’t come cheap. However, I envision a world where premium travelers no longer have to suffer the agony and humiliation of being offline. Today’s Weekly Wish: long-haul international flights should offer free Wi-Fi for first and business class passengers.

GoGo offers ground coverage for many airlines in North America.

For starters, let’s talk a little bit about the technical details of offering WiFi on an aircraft. There are essentially two ways a plane can connect to Wi-Fi: using ground stations (much like our cell phones do), or using satellite technology (obviously required for overseas flying). Installing this feature on existing planes can set airlines back at least $100,000 per aircraft. Those of you who travel domestically often have likely used GoGo at least once; their network is powered by ground stations. Participating airlines are Air Canada, AirTran, Alaska, American, Delta, United, US Airways, and Virgin America. Depending on the number of users and the specific location, the speed and reliability of the connection can leave something to be desired.

GoGo’s ground-based installations won’t do you any good if traveling overseas, and many airlines are recognizing the importance of keeping long-haul international passengers connected while in the air. TPG gave an overview of Wi-Fi coverage on both U.S. and foreign airlines last year, but here’s a quick rundown of notable current offerings:

American's new 777-300ER planes offer international Wi-Fi.

American’s new 777-300ER planes offer international Wi-Fi.

American: Last year, TPG had a chance to fly from JFK-GRU in first class on American’s brand new Boeing 777-300ER, the airline’s first international plane to be equipped with Wi-Fi. Though it was free at the time, it now would set travelers back $12 for two hours, $17 for four hours, or $19 for the duration of the flight.

Delta is in the process of rolling out Wi-Fi on their entire long-haul fleet.

Delta is in the process of rolling out Wi-Fi on its entire long-haul fleet.

Delta: Back in June 2012, Delta announced plans to equip their entire long-haul fleet with satellite-based Wi-Fi coverage, though this didn’t actually become a reality until earlier this year. Introductory pricing is available for $14/hour ($8/hour for mobile devices) or $24.95/flight ($14.95/flight for mobile devices). The target completion date for fleet-wide Wi-Fi is 2015, though it will be interesting to see if they can reach that goal.

United manages their own Wi-Fi network on the majority of their planes, with many international aircraft already equipped with connectivity.

United manages their own Wi-Fi network on the majority of their planes, with many international aircraft already equipped with connectivity.

United: United actually differs from the other legacy carriers in that they manage their own Wi-Fi network (aside from their 757 p.s. service from JFK to LAX/SFO, which is managed by GoGo). This coverage is delivered via satellite, so it includes many of their long-haul aircraft. As I write this, almost all of their 747-400 planes have the technology installed, with plans to equip their 767/777 by July, 2015 and their 787 fleet at a later date. Pricing varies by the distance of the flight and is charged on a segment-by-segment basis (aside from DIRECTV-equipped planes, which charge a fixed hourly rate). For more information, visit this page.

Aer Lingus is the only carrier to offer free Wi-Fi to business class passengers, a model I wish others would follow!

Aer Lingus is the only carrier to offer free Wi-Fi to business class passengers, a model I wish others would follow!

Aer Lingus: The Ireland-based carrier has actually fulfilled my wish in advance! All of their transatlatic A330 flights are equipped with Wi-Fi, and business class passengers can surf for free (one-hour of access usually costs €10.95/$14.95, and 24-hour passes are available for €19.95/$24.95).

British Airways: Despite their global reach, British Airways is VERY limited with their Internet access; the only international WiFi offering is on their all business class flight from London City to JFK. Even that is only provided for mobile phones, and passengers need to have international roaming enabled and be prepared to pay data charges directly through their mobile provider.

Emirates: The Dubai-based airline is full of bling, but in-flight WiFi is only available on most A380 flights and select Boeing 777 flights. Prices start at $2.75 for smartphones and $7.50 for laptops. TPG experienced first class on Emirates’ A380 back in November of 2013, but sadly the Internet wasn’t working, so he had no first-hand experience to report!

Lufthansa's FlyNet is widely available on their international long-haul fleet.

Lufthansa’s FlyNet is widely available on their international long-haul fleet.

Lufthansa: In addition to being ahead of the game in soccer, the Germans also lead in international WiFi connectivity. Lufthansa’s FlyNet platform offers internet access on over 90% of its long-haul fleet (and is currently being added to the airline’s A380s). This service costs €10.95/hour or €19.95 for a 24-hour pass that can be used on any FlyNet-equipped aircraft.

As indicated by these examples, airlines are all over the Wi-Fi map, though just about every carrier has at least announced plans to equip its planes with some form of connectivity. However, with the high cost of installation, limited international offerings, and (relatively) high prices, why would an airline want to offer first and business class passengers free Wi-Fi? Well, it comes down to one key economic term: marginal revenue.

In an ideal world, airlines could adjust prices on each and every route to ensure that their planes left with every seat occupied and that the total revenue for each flight would make it profitable. However, price is just one aspect of an airline’s offerings. Travelers consider many other things when booking flights, such as convenience of times/connections, frequent flyer benefits, and on-board service offerings. Any extra incentive an airline provides could be enough to sway travelers toward them and away from the competition, and in today’s connected world, I strongly believe that free Wi-Fi is such an incentive. A single additional revenue passenger per flight would more than cover the small cost of providing free access for all premium travelers. For long-haul passengers, knowing they won’t be out of touch for 6+ hours is powerful peace of mind. They may not want or need access for the entire flight, but it would sure be nice to have the option!

Implementation would be straightforward. On each flight, the airline (or Wi-Fi provider) could generate a promotional code that would only be good for the duration of the flight, and would be limited to the number of first- and business-class passengers on the plane. There could even be an added layer of security where a traveler would need to input his/her first and last names to “verify” that he/she truly is a premium passenger. That would prevent a coach passenger from guessing the code and using up one of the free logins.

JetBlue's new Wi-Fi platform uses higher frequency Ka-band technology.

JetBlue’s new Wi-Fi platform uses higher frequency Ka-band technology.

Until Wi-Fi becomes a standard feature on long-haul flights, we likely won’t see this wish come true. Why would Lufthansa offer something for free when they already stand out for simply HAVING the technology on almost their entire long-haul fleet? However, it may come to fruition sooner than you may think. As I mentioned before, there are two ways that airplanes access the Internet: ground stations and satellites. Until recently, satellite coverage was slow and quite expensive, because it was accessed using lower frequency L-band technology. That’s gradually changing, as more companies have begun using Ku-band technology to provide greater bandwidth and faster speeds (Lufthansa, for example). Even more promising is Ka-band technology, which could represent an exponential growth in bandwidth at a fraction of the cost. Though this technology is still very new, JetBlue has begun rolling it out on their Airbus planes, and plans to add it to their entire fleet over the next couple of years.

At the end of the day, free internet is a relatively insignificant aspect of international travel. Bring able to access the Internet at all from a metal tube flying at hundreds of miles per hour several miles above the Earth’s surface is an incredible feat of technology. However, as a GoGo monthly pass holder on Delta, I would welcome any improvement that would help improve bandwidth and lower prices.

Would free Wi-Fi be enough to sway you toward one airline over another? Please share your thoughts in the comments below!

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • http://www.digmydata.com/ Adam W

    Just flew from IAD to Munich. LH A330 advertised wifi but it didn’t work. Could be user error – but if so – it is way too complicated. But it was fine since I should be sleeping anyway.

    Unfortunately my return flight during the day on United didn’t have wifi at all… 767.

  • Santastico

    This is another terrible way airlines manage their marketing. I don’t think I would change airlines because they offer free wi-fi on business or first class but what is the bug deal in “adding” $20 to the cost of a business class ticket and making wi-fi “free”? It is all about perception. Same thing goes to luxury hotels that charge for a bottle of water when a guest is paying over $500 for that room. Or charging for a espresso on a $35 plus breakfast. These are vary marginal costs that when made “free” adds lots of value to a customer. Not related to airline but on the same comment on charging for marginal items, I applaud the customer service of Trump Hotels. I paid $600 per night for a room at their hotel in Honolulu. Breakfast was included and they had an extra a la carte menu with several options you could order outside the buffet: all free. Plenty of bottles of water in the room: free. Beach bag with cold bottles of water, beach towels, sunscreen, fruits: free. A kid’s menu of video games they could request to be brought to the room including the console: free!!!! Well, I understand the cost of all those “perks” were already included in my room rate but I was comfortable paying that. It felt way better I did not have to pay for every single extra in the hotel. Same goes to wifi on planes. If you are already paying $5k plus for a seat on business class wifi should be a perk.

  • Nick Ewen

    Interesting to hear about your Lufthansa experience. I have heard many reports of international Wi-Fi not working, so it likely wasn’t user error. Hopefully the new Ka-band technology will help!

    As for United, none of their 767′s are currently equipped with Wi-Fi (http://www.united.com/web/en-US/content/travel/inflight/wifi/default.aspx?). They have July 2015 listed as a target date for completion on their 737/757/767/777 fleet, but that’s a TON of planes to configure in just a year.

  • Nick Ewen

    These are all fantastic points. At the end of the day, it does all come down to perception and a company’s philosophy. Think about Spirit Airlines, the “nickel and dime” king of the skies. It’s a totally different business model than Trump Hotels; they would rather keep their prices low and allow travelers to choose the amenities that best suit them. This is similar to the point I try to make in the post: airlines shouldn’t try to nickel and dime their premium passengers. Include this type of service that the business traveler would want. The cost of doing so is negligible.

    Thanks for the comments!

  • Darrin Earl

    The target audience is exactly why this doesn’t happen – the folks who NEED wifi are also, typically, the same folks who aren’t actually paying for wifi – their employers are, and so the price is happily forked over.

    It’s exactly like your hotel example, as “full service” hotels are the ones NOT providing free wifi as part of the room – versus most of the roadside motels that advertise free wifi.

  • http://www.digmydata.com/ Adam W

    Hard to know where the issue was. Their satellite service was working (I was able to watch a replay of the brutal Germany/Brazil match). But accessing the internet just didn’t work (as in the signup). Perhaps if I had gotten past the signup, the internet would have worked?

  • Nick Ewen

    True, but wouldn’t this be just one more thing that airlines could add to the “package” of services that would make a business traveler’s flying experience better? Paying with other people’s money does make it easier to stomach, but I still think this should be an included perk.

  • Nick Ewen

    If the sign-up page wasn’t working, I’m guessing it was an issue with the Internet. Providing satellite TV is a one-way transaction, but with the Internet, you have to send AND receive data. I am nowhere near an expert on the technical details of providing these in-flight satellite-based services, but my guess is that the Wi-Fi wasn’t working. Like you said, on an overnight flight, not a huge deal…

  • Andrew

    The reason that airlines can charge for things like wifi in first/business class is that the employers of most business travelers will pay for it. No employer will turn down an expense report for in-flight wifi that says “purchased in-flight wifi to remain productive and responsive to clients and colleagues during flight.” On the other hand, airlines give free booze to first/business class passengers because employers specifically would not pay for that. Planes that are equipped with live television generally give that to first/business class for free for the same reason; a business traveler can’t justify expensing television.

  • Darrin Earl

    Of course it can be, and some airlines will play around with that (note Aer Lingus).

    But I can guarantee that the business cases for installing and running wifi were based on generating incremental revenue – and they cost money to operate. Bundling it means that the main business has to subsidize it, which will be a tricky internal change.

    Plus, it’s pretty clear that airlines are really after unbundling EVERYTHING lately. Why bundle this one thing?

  • Santastico

    If the employers are the ones paying for wifi they are also the ones paying for a business class ticket. I travel a lot on paid business class by my company and as customer I would feel way better to expense a $7,020 ticket and zero wifi cost than a $7,000 ticket and another expense of $20 for wifi. It is all about perception. Also most of the times I think twice if I really need the wifi and if I should pay the extra $20 for it. If it was already charged on my ticket and it was “free” I would definitely use it.

  • Nick Ewen

    I would say that the “unbundling” trend you mention is mainly based on economy tickets. Business/first class passengers get free checked bags, free lounge access, free changes (for many fare classes), free food/alcohol on board, and other bundled perks. This would be one more thing to add.

    Of course, this is a business decision, and as of now, airlines don’t have the business case for providing it free. I wouldn’t be surprised if more widespread implementation of Wi-Fi (coupled with newer, faster technology) does change this. Only time will tell!

  • Dave

    Anyone paying to fly business/first is probably on a business trip and can afford the marginal extra cost. Anyone upgraded by status or points can’t really complain about another $10 or $20.

    Airlines have the sunk costs of all those older in-flight entertainment systems, which add a lot of weight. They could rip those out and save millions in fuel costs since so many people bring their own phones/tablets for entertainment nowadays. Installing wi-fi *instead* of those systems is probably a net profit gain, even if it were free, but why give it away if they can charge.

  • Dave

    Also, forgot to mention that free wi-fi is most commonly a loyal-customer perk. Southwest DOES offer free wi-fi to its top-level frequent fliers. Marriott gives free wi-fi and breakfast to me but I’m a Platinum. Yet without that I can pay the highest rack rate to stay at a Marriott Marquis and will still be charged for wi-fi and need to buy breakfast. So airlines are not alone in this pricing scheme.

  • VVFF

    I believe Etihad has free wi-fi for First Class passengers. I got free wi-fi on a flight from Dusseldorf to Abu Dhabi last June. It may have been an introductory thing but I don’t think it was.

  • Kimberly Rotter

    “Agony and humiliation…”? Melodramatic much?

  • Nick Ewen

    Well, I was a theater major in college! And that was supposed to be taken tongue-in-cheek…:-)

  • Nick Ewen

    That may have been an early special; their website (http://www.etihad.com/en-us/experience-etihad/on-board/inflight-entertainment/, then scroll down to the “Onboard connectivity” section at the bottom) just indicates that passengers need to pay, with additional details provided on board.

  • Nick Ewen

    You’ve actually seen more recognition of this “personal entertainment” recently. I know Delta (for one) offers customers the ability to watch TV shows on shorter flights beginning at $0.99, much cheaper than paying for full Wi-Fi access. I think this is why airlines are not looking to expand IFE beyond long-haul international routes. Why install these systems on an old 757 when they can allow customers to access videos/movies on demand?

    That being said, I am (hopefully) flying from MCO-LAX tonight on an ex-Song 757 with the personal TV’s, and I do love having them!

  • James Coleman

    Turkish Airlines has free wifi on its flights from Istanbul to the U.S

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