Airlines feel the need for Wi-Fi speed

Every day, the internet is filled with tweets, Facebook status updates and emails eagerly announcing a passenger’s first experience using inflight connectivity. Even the Black Eyed Peas pay homage to antennae and radomes in one of their songs: “fast internet/ stay connected in a jet/ wi-fi, podcast/ blasting out an SMS”.

Airlines expect inflight connectivity to become a loyalty draw and a source of ancillary revenue. But the rush to outdo or catch up to the competition is only valid if an airline has a compatible solution.

Some industry stakeholders believe airlines should extricate themselves from the scuttle and evaluate their customer proposition and how much bandwidth they require.

“There’s a sensational demand for bandwidth. The technology will never catch up. It’s like the ’80s and ’90s and looking for a faster computer,” says Michael Small, president and CEO of Gogo, which supports inflight internet over a dedicated air-to-ground (ATG) network in the United States. But he is adamant that “no one will be able to satisfy bandwidth needs better than [Gogo].”

The Chicago-headquartered firm, which owns an exclusive ATG broadband licence, has certainly met with some successes. It counts AirTran Airways, Alaska Airlines, American Airlines, Delta Air Lines and Virgin America among its customers.

US low-cost giant Southwest Airlines went in a different direction to its rivals when it tapped California-based Row 44 to provide Ku-band, satellite-supported connectivity to its fleet of Boeing 737s; about one fifth of the fleet has been equipped.

But another low-cost carrier, JFK-based JetBlue Airways, believes it has found an even better mousetrap than Gogo and Row 44. In 2007, the carrier become the first to trial inflight connectivity when it equipped a single Airbus A320, dubbed Beta Blue, with a narrowband “Kiteline” ATG system provided by its own subsidiary LiveTV.

Kiteline restricted how JetBlue could customise the system and had limited bandwidth; the carrier switched off the system last summer. “It wouldn’t be sustainable over a longer period of time when more and more customers want to use it. So we said it’s a great proof of concept, but it’s not going to be where we want to be for the next 10-15 years,” says JetBlue director of product development Rachel McCarthy. The carrier ruled out Gogo on the same grounds.

Instead, JetBlue will provide what it believes is the current pinnacle of inflight connectivity: a high-speed, Ka-band service from provider ViaSat. Its LiveTV unit will manage the integration of the ViaSat broadband components aboard the aircraft, as well as lead the certification process and handle installations.

United-Continental has also selected the ViaSat/LiveTV Ka product for some 200 Boeing aircraft operated domestically by Continental, while the carrier has opted for Panasonic Avionics’ Ku solution for the rest of its mainline fleet.

Airlines and providers continue to debate Ka’s feasibility timeframe. Unsurprisingly, those banking on it are most bullish, and McCarthy says that, when ViaSat’s Ka switches on late next year, it will let JetBlue “leapfrog the competition”. For passengers, Ka could offer speeds of up to 50 Mbps, compared to reported typical speeds of 1 Mbps for Aircell and 30 Mbps for Row 44. ViaSat offers JetBlue more bandwidth but also the ability to regulate the amount, as well as “complete” pricing flexibility.

McCarthy points to last December’s Google promotion of free access to Gogo as an example of how the capacity of the prevalent ATG service can be easily strained. During the promotion, Gogo became inundated with users, who reported sluggish speeds.

“[Gogo] is successful in offering connectivity to a limited number of customers, but the challenge is if you’ve got a full aircraft with everyone wanting to use it, they can’t offer a product they’re promising,” says McCarthy. “We have the ability to grow with Ka, as opposed to Gosh, there’s more than 10 people on the plane who want to use it – we’re stuffed.’”

Gogo’s Small dismisses such arguments. Next year, Gogo plans to switch on ATG-4, which will be faster and offer more bandwidth over ATG yet require only “modest change” to ATG-equipped aircraft.

ATG-4 is part of Gogo’s planned portfolio of solutions to accommodate different aircraft sizes, and thus bandwidth and speed requirements. “I suspect regional jets are happy with our ATG technology. A 737 might go to ATG-4, and maybe a 757 or 767 that flies over the US with a lot of passengers might add Ka to supplement the ATG-4,” says Small.

Indeed, Ka is firmly on Gogo’s technology roadmap; London-based Inmarsat recently selected Gogo as a partner to bring Inmarsat’s Ka-supported Global Xpress aeronautical service to the commercial market. Airbus/SITA joint venture OnAir was also picked to distribute Global Xpress.

Until Ka rolls out, Aircell is willing to offer Ku as a bridging solution to airlines, but Small does not recommend it. “It costs three times as much to install, it takes longer, it weighs more and bandwidth costs are more expensive than ATG,” he says. “Avoid Ku if you possibly can.” For international flights, he advises airlines to wait for Ka and in the interim emphasise to passengers the embedded IFE systems typically offered on international aircraft.

For Southwest, which is equipping its fleet with Row 44’s Ku, the carrier has straddled wanting a solution and yearning for speed. Marketing manager Angela Vargo says Southwest’s contract with Row 44 gives it ATG’s deployment-ready status with a Ka-like connection, and an added bonus: a portal.

Like JetBlue, Southwest says owning the product and being able to set prices and promotions “is very key for us”. It plans to finish fitting its 737-700s with Ku by 2013 and later determine the timetable for its other 737 variants. But it is not talking about the connectivity future of Gogo-equipped AirTran, which it acquired last year.

Vargo says Southwest has not run into any bandwidth-availability problems, but is also not looking to cut back. “I don’t think in this world you can have too much bandwidth,” she says. The carrier is keeping an eye on Ka’s development. And its partner Row 44 is studying an upgrade path.

“We don’t ever want to put our customers in a position to not be forward upgradeable,” says Row 44 chief commercial officer, Howard Lefkowitz. “[Our platform] is future compatible in the event the future comes to bat. For airlines that care about their market share, you don’t want to give yourself dial-up access. You also don’t want to wait for the future thing that may or may not happen.”

A new portal, being developed by Row 44, will be rolled out by Southwest. “It’s extremely important,” Vargo says of the portal, which will be branded and include “robust entertainment options”, ways to relay messages to passengers, advertising and e-commerce opportunities that Southwest expects will contribute to overall revenues, though it declines to say by how much.

Outside the United States – which does not permit the inflight use of cell phones – mobile connectivity currently dominates the landscape, though Ku providers Row 44 and Panasonic have made inroads.

SITA/Airbus joint venture OnAir has secured a laundry list of customers for its inflight GSM service, which operates via Inmarsat’s L-band-based SwiftBroadband aeronautical service.

“When individuals have the choice, 95 per cent of passengers use the GSM network,” says OnAir CEO Ian Dawkins, who highlights the rising influence of mobiles. “We’re seeing something that’s just beginning and going to explode over the next five years.”

Dawkins sees connectivity primarily as a service and not an opportunity to frolic in piles of cash. “It’s something that will not necessarily make airlines a lot of money but it will pay for itself. There is a value in having connectivity to the aircraft, which a lot of the large airlines are starting to recognise.”

Many of those airlines offer connectivity on wide-body aircraft performing long-haul flights, but Brazil’s TAM is focusing on its short- haul domestic network. “They see their single- aisle fleet as moving lots of business people from city to the next city,” says Dawkins. “Those business travellers want to be connected.”

On the long-haul front, Cathay Pacific is among a growing list of carriers to select Panasonic’s inflight internet solution together with a GSM offering from Panasonic partner AeroMobile – both are operated via Ku.

Driving equipage, says Cathay head of product Alex McGowan, is not ancillary revenue opportunities but the benefit to passengers. “As a premium airline with a focus on the business traveller, it’s the right thing for us to do.”

Cathay also intends to offer a device-neutral pricing model by having separate rates for iPhones and smartphones, BlackBerries and laptops based on expected passenger usage: iPhone users will mainly want to update and use applications, not browse the internet, while BlackBerry users can check email with little data usage, although the rates will be for unlimited usage.

McGowan expects typical usage per passenger will be around 20MB on a long-haul flight, but notes “there may be one user in a 100 or one user in a 1,000 who stays awake for an entire 15 hours surfing the internet and they will use more than the price they paid.”

Cathay’s unlimited rates will not be married to eye-gouging prices: for a long-haul flight, it expects to offer iPhone connectivity for “well under USD 10” and support BlackBerries over GPRS for around USD 5. “It’s trying to be as fair as we can be and it’s trying to be as aggressive as we can be with pricing,” McGowan says.

That will be a relief to the blogger who, dismayed at connectivity costs, wrote a post entitled “For the love of God, don’t use your iPhone on Air New Zealand’s new Airbus flights.”

The Kiwi carrier’s partnership with OnAir and Vodafone charged NZD 3.50 (around USD 2.70 at the time of writing) per minute on outgoing calls and NZD 20 (USD 15.40) per megabyte of data. “There’s a reason your iPhone has an airplane mode,” iPhoNewZealand blogger, known only as Steve, wrote. “We can only imagine that the Air New Zealand/Vodafone partnership doesn’t actually want you to use inflight data, as it’s the only possible explanation we can think of for such completely outrageous pricing.”

OnAir’s Dawkins, although not directly responding to this incident, has another suggestion: “the majority of people who use phones don’t ever see their bill.” Additionally, he notes, people who travel a lot understand what their international roaming rates are like.

But McGowan believes business travellers do care about pricing. Cathay negotiated the rates AeroMobile and Panasonic would charge, of which it receives a share. “You should charge for a fair price for a high-value product. That’s what we pushed our partners, AeroMobile and Panasonic, to do.”

Dawkins concedes Ku band currently offers more capacity than OnAir’s L-band solution, “but the reality is, when you’ve got fleets of [Ku] aircraft, you will then have less capability and capacity than L band.” Nor is the current bandwidth demand a problem for OnAir. “On aircraft with very high usage, we only see 10 per cent of our capacity actually being used per aircraft,” Dawkins says.

Pricing for inflight GSM is also expected to come down. “We’re seeing mobile phone operators start to recognise that there are a lot of people flying and what we’ll see happening in the New Year is people will receive information in their bill offering them specific packages if they fly.”

Meanwhile, as a newly named distribution partner for Inmarsat’s Global Xpress, OnAir will soon start offering superfast Ka to airlines. Further details will emerge over the next year, says Dawkins.