Southwest CEO eyes potential additional investment in bandwidth

January 21, 2013

Content, Multimedia

Southwest tail air team images Southwest CEO eyes potential additional investment in bandwidthSouthwest Airlines is examining tweaks to bandwidth availability as it begins to promote its inflight Wi-Fi and streaming television options more aggressively.

“We may need to either with our partner make more investments for bandwidth, or we may have to consider some tweaks,” Southwest CEO Gary Kelly told a group of investors in late 2012.

The study comes at a time when passengers are increasingly complaining about the speed of various onboard Wi-Fi systems. And inflight connectivity providers – including Southwest’s Ku-band satellite-supported connectivity provider, Row 44 – are coming to terms with the fact that its time to manage passenger expectations.

“Maybe none of us – Row 44 and our competitors – did a really good job of setting expectations. But it was never going to be like your FiOS system at home, where you’d have 25 mbps up and down the pipe; that was just never the prescribed outcome that we were looking for. So I think airline passengers will have a very robust experience for Wi-Fi, for streaming, but it’s just not going to be like a home experience,” says Row 44 CEO John LaValle.

Row 44 has conducted internal tests that entailed building algorithms to determine user activities that are bandwidth intensive in order to allocate bandwidth for specific functions, though Southwest has not availed itself of bandwidth management as yet.

Meanwhile, the take rates of Wi-Fi use on Southwest are improving, says Kelly. “You look at the mix of short-, medium, [and] long-haul flights. As you would guess, the short-haul flights, the take rates are the worst,” he explains. “The long-haul flights, the take rates are pretty good- still single digits.”

Overall reliability of the Row-44 inflight Wi-Fi system is about 98%, says Kelly. He stresses that Southwest will not be satisfied until the system’s reliability reaches the 99.5% range. However, he remains complimentary of the inflight connectivity product. “We’ve seen nice progress,” say the Southwest chief executive. The current reliability rates are a five percentage point improvement over the 93% system reliability Southwest was recording in mid-2012.

“It’s bleeding-edge technology,” adds Kelly. “So we’ve definitely had some problems with some components that have been switched out.”

Southwest also appears to be happy with its recently introduced IPTV offering featured on its Next Generation Boeing 737 narrowbodies, and believes opportunities exist to expand the content featured in its streaming television product.

The carrier began trialling streaming IPTV on its aircraft equipped with Wi-Fi in January 2012, and later expanded the product to all of its 737s featuring Wi-Fi. It has tested various price points of $3 to $8 for its streaming television product, and offers sports and news content including NBC sports, MLB, NFL RedZone, NFL network, Fox News, MSNBC, Fox Business News, CBS-NYC, and CNBC.

Kelly says he’s been very pleased with IPTV, citing the “very good” performance of the product. “Intuitively, I thought it might look like streaming video,” he remarked. “It’s TV, and it looks really, really good.”

He says the opportunity exists to expand the television offering “as well as to begin selling movies. So the inflight entertainment aspect for Southwest is very promising”. And he says Southwest will start to promote its inflight entertainment offerings “much more aggressively in 2013”.

(Main photo and attached from Air Team Images.)

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About Lori Ranson

Lori Ranson has spent more than a decade covering the commercial aviation industry, specialising in the North American market. Previously she was Americas Air Transport Editor for Flightglobal and currently is a Senior Analyst at the Centre For Aviation and a freelance journalist. Her coverage has touched on all aspects of commercial aviation, including marketing and distribution, network development, safety, maintenance, repair and overhaul, aircraft programmes, alliances, regulatory developments and finance.

View all posts by Lori Ranson
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