News about the pricing change to $10 per hour has spread rapidly, and Gogo manager of community marketing Scott Carmichael says the message that reached the media “was that everything had changed on all the flights”. The only routes included in the scheme are New York to Los Angeles and San Francisco, clarifies Carmichael. Virgin America operates in those markets alongside competitor United, which features Gogo’s connectivity option on its Premium Service cross-country flights.
“We started off with flights where we have the most pressing bandwidth constraints,” explains Carmichael, who says altering price points is not a new practice for Gogo. “In order to manage our bandwidth the most effective way we do experiment with pricing,” he states. Gogo is currently offered on roughly 6,800 daily flights within the US.
At present, Virgin America charges $17.95 for Gogo access on flights three hours or longer and $9.95 on a flight spanning 1.5-3 hours. Pricing varies by airline, and United Airlines does not publish prices for its connectivity offering.
Asked if Gogo had concerns about customer pushback regarding the pricing change Carmichael says the company was always concerned about the perceptions of its passengers, “but in this case we have to balance demand – how many passenger are online – with the price”.
He stresses that Gogo’s move to charging $10 per hour is not the end of flat-rate pricing on those select transcontinental flights. The company still sells flight passes for those markets, and recommends passengers pre-purchase the flat-rate packages on the ground before their departure.
Gogo is preparing to roll out its next-generation ATG-4 connection solution that promises three times more bandwidth per aircraft. As part of a contract extension with United, the carrier’s P.S. service will feature the bolstered bandwidth, but the pricing change is separate from that upgrade.
Carmicheal did not specify if additional flights would be included in the new $10 per hour price point. “The thing about being a leader in this market is we can’t turn to a research firm to tell us what the best thing to do is. So in this case it is a question of we do these price trials, we see how the feedback is and see we see how things are performing.”