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The free wifi conundrum

To charge or not to charge? That is the question facing airlines when it comes to providing inflight wifi. Connecting to the internet is becoming a service people expect to use for free, even in the air. Kerry Reals explores the costs of that connection
 

The high price airlines have to pay to install and run their connectivity systems leaves them facing a dilemma: if they adhere to the wishes of their passengers and offer a free service, how can it be monetised?

 

One carrier which recently stuck its neck out and stated that free onboard wifi would become standard in the future is Emirates. Its president, Tim Clark, says: “If we could offer good quality wifi connections for everyone on board at no charge tomorrow, we would do it… Ultimately, we believe that onboard wifi will become a free service; a standard that customers can expect on all full-service airlines, just like onboard refreshments and personal inflight entertainment.”

 

The Dubai-based carrier spends over $20 million a year on installing and operating the inflight connectivity systems that enable its onboard wifi services. What’s more, Emirates is “subsidising or waiving the high cost of buying data for passenger use” and, while some usage fees do currently apply, it envisions removing these charges when technical limitations are lifted.

 

“Free, onboard wifi became a reality on 2 October 2014 to celebrate Eid. Since then, customers have been able to enjoy free wifi on about 50 of our Airbus A380s. This has been a 10mb free package, which is enough for social media, light email etc, but then customers can pay a token $1 to get a further 500 or 600mbs of data – more than is needed by most,” explains Emirates vice-president product, publishing, digital and events, Patrick Brannelly.

 

“On the other five A380s and the 30 Boeing 777s, there’s a technical challenge at the moment which means we have to charge for the service, so we’ve set this at the token $1 which provides up to 500 or 600mbs of data. We are working to get this limitation removed so all wifi-equipped aircraft can offer the service for free.”

 

Emirates’ A380s are fitted with OnAir’s inflight wifi solution, which is supported by Inmarsat’s L-band satellite-based SwiftBroadband service. OnAir chief executive, Ian Dawkins, says the connectivity provider is “supporting Emirates with its campaign for free inflight wifi”. He adds: “The promotion has been very popular, with overwhelmingly positive comments on social media.”

 

Pricing, says Dawkins, is decided by the airline, with OnAir “encouraging all our airline customers to opt for a time-based structure”. However, “at the same time, there is a clear trend towards providing wifi free-of-charge, either for all passengers or for premium passengers” he notes.

 

“This reflects increasing expectations that wifi will be provided for free, as it increasingly is in hotels and restaurants,” says Dawkins.

 

But the OnAir chief makes the point that inflight connectivity systems can have a much broader use than simply enabling passengers to access the internet – airlines will increasingly be able to reap operational benefits that could help to significantly cut costs.

 

“Connectivity is becoming a tool for airlines to streamline their operations, with the introduction of the e-Aircraft,” says Dawkins. OnAir is working with its shareholder, SITA, to develop the e-Aircraft programme, an integrated nose-to-tail solution which aims to widen the operational uses of inflight connectivity for airlines.

 

“The availability of data means the cabin crew can provide an enhanced service, as well as minimising any disruption,” says Dawkins. “It helps cut fuel consumption with efficient flight-planning and weight reductions, plus it also helps reduce turnaround times, therefore improving on-time performance and aircraft availability. Even an availability increase of 1% can equate to savings of millions of dollars.”

 

Interestingly, OnAir believes that the future will see “passenger connectivity make up around 30% of inflight online activity, with the remaining 70% being used by the airline,” says Dawkins. >>


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