The economics of in-flight Wi-Fi | Hacker News Reader

The economics of in-flight Wi-Fi

fortune.com

95 pointsprostoalex90 comments

The economics of airplane wifi remind me of the economics of the hotels wifi. Go to a 5-star hotel and you will pay 15 extra dollars for the priviledge of having a lousy internet access. Go to a small hostel and you will get good internet access for free.

You have to take advantage of that business traveler who is expensing everything has "has to have internet access for work."

My understanding (though I don't have any sources and it could just as easily be hearsay) is that nicer hotels jumped onto the new business model and signed long-lasting contracts with providers of internet service when things were just getting established. So it's less that nicer hotels are necessarily trying to milk you, and more that the nicer hotels jumped onto the bandwagon when it was still a bad financial decision, and are passing their bad luck onto you.

Of course, I wouldn't at all be surprised if your suggestion is right, and they're just trying to milk the more well off clients.

I'd be surprised to learn that any of these hotels had e.g. twelve-year linens contracts. For that reason it's really difficult to learn they signed an exclusive wifi service contract for that long. How did they know wifi would still exist now?

Marriott are throwing in wifi these days, but you have to pay for premium access if you want to stream some Netflix

I am at a Marriott now, and am streaming just fine...

What's the speed cap?

> Marriott are throwing in wifi these days, but you have to pay for premium access if you want to stream some Netflix

Note that this is after Marriott's best efforts to block all wifi hotspots to force guests to use hotel wifi:

http://arstechnica.com/tech-policy/2014/10/after-blocking-pe...

edit: a story from after Marriott unsuccessfully asked the FCC if hotel operators could block wifi hotspots on their properties from all their guests: http://arstechnica.com/tech-policy/2015/01/fcc-blocking-wi-f...

No, that was one single Marriott and it was the conference center -- they were trying to force exhibitors to pay outrageous internet fees, not hotel guests.

The fine was for disrupting wifi hotspots in the convention space at a single Marriott, but Marriott then petitioned the FCC to allow them to do the same for any guest on their property, including properties without convention spaces[1]. The FCC turned them down.

(I've amended my original post to include a link from the conclusion of the whole affair)

[1] http://apps.fcc.gov/ecfs/document/view?id=60000986872

Marriott owns ~20 different hotel brands. Some of those brands (e.g. Courtyard) offer free wi-fi, but others do not.

http://www.marriott.com/marriott/free_wifi.mi

It's the same reason that hotel minibar pricing is so high.

Don't worry, minibars are dying too: http://priceonomics.com/the-rise-and-fall-of-the-hotel-mini-...

It's hard to keep that level of pricing with convenience stores nearby and more and more companies unwilling to reimburse for the minibar.

Minibars are still a big thing in Asia, especially at resorts where convenience stores are probably far away.

The exact reason people are resorting to WiFi hotspots more and more.

Is there a smartphone these days that doesn't come with hotspot capabilities? I use mine constantly, and more often than not (when traveling domestically in the U.S.) my LTE speeds far outstrip hotel/airport provided speeds.

Verizon.

I use mobile hotspots with Verizon all the time. I have a Galaxy s4.

It tends to also be location based. I find wi-fi at hotels in big cities almost universally bad, while the same hotels outside the cities to be generally good.

The sort of people who go to expensive hotels don't care about expensive wifi, or wifi at all. Cheap hotels have to use it as a differentiator from each other.

During my travels in northern Taiwan, I found that every hotel I stayed at had free wifi, free snacks, and free necessities like toothbrush, comb, etc. One place even stocked the fridge with a couple free sodas. The wifi was quite good, comparable to what one would expect from, say, a Starbucks. They did some throttling, but my tunnel back to the States fixed that.

It was a decidedly different and pleasant experience, compared to American hotels. The toilets were great too. The only downside is the amount of smoking that goes on in eastern Asia hotels (even if you're on a no smoking floor).

I complain (politely) about the internet fee at the desk, and more than 70% of the time its removed from the bill. The front desk almost always has authority to make those kinds of adjustments.

What are some things you say when politely complaining?

Many business travellers have a per-night cap on the amount they can spend on a hotel, but no cap for wifi expenses. Unbundling the wifi from the room charge means the hotel can capture customers for whom the rate would otherwise be 'over cap'.

I've noticed this most at mid-range places, rather than the upper or lower end of the market, which seems to treat wifi as a necessity.

This is why JetBlue won best customer service in 2014 and it doesn't seem like they really have serious competition; they actually make an attempt to make customers happy.

I book JetBlue every single time I can (even when it's more) because I can actually use WiFi without spending more than my (already expensive) ticket cost, and I get more than a single miniature water bottle.

Except JetBlue is switching to low-cost-carrier style fare tiers, charging for checked luggage and other ancillaries, etc., largely at the behest of their shareholders who feel that being indistinguishable from the other budget airlines would be more profitable.

They're not quite the same as other LCCs, they do have "mint" service on transcons which is quite competitively priced.

I stick to the legacy carriers because I tend to buy fares without all the usual bullshit included, and because I like the mileage program. (You can't redeem JetBlue miles for a first-class ticket to Hong Kong.)

You'll pay extra for Jet Blue, to avoid paying $10 for WiFi??

On a recent American Airlines flight, a 30 minute pass cost me $10. On a not so recent AA flight, an all day pass cost me $35. Depending on the cost differential in a JB ticket, it might be worth it.

Sidenote - the prices on their pricing page [0] are significantly different than what I paid which makes me think the airlines are getting a significant enough cut to keep the status quo.

[0] - http://www.gogoair.com/gogo/listAllProducts.do

The $10 for wifi nets you something akin to 28.8K modem speeds. So yes, I'd gladly pay more for a ticket that provided something approaching usable speeds. When google.com takes 45 seconds to load, the connection is basically useless.

Paid for inflight wifi on United earlier this year (FRA to SFO) streamed one way video all hands just fine.

Gogo wifi on Alaska between SJC and SEA, service is quite variable.

Its worse! The high latency makes it hard to use ssh.

Yes. this. I also have no interest in supporting the business if their principals are as described in this article - basically saying "whatever, we know we can still make money, let's charge as much as we can." Plus, like I said in my original comment, JetBlue seriously lets you snack for free waay better than any other airline I've flown (all major ones).

From an earlier HN post, apparently when Gogo invented their tech, basically every airline signed long term contracts at ridiculous rates. Even if they want to compete, their locked into a cost structure using outdated technology.

I bet in a couple years the contract cycle will churn and all of a sudden, we'll get a EDGE/3G level performance at reasonable prices.

Does anyone really expect anything of airline flights anymore? At least those of us in commercial/economy class?

Years ago great customer service was defined as giving someone the can and some free peanuts. Now it's touch screen "entertainment in-flight systems." Not like any of those things have made the flying experience any better. So I just pick the cheapest flights available. Sure, Wi-Fi is a plus, but the environment in economy isn't exactly ideal for work.

I've primed myself to fall asleep as soon as I get into my seat before takeoff, regardless of time of flight.

Now it's touch screen "entertainment in-flight systems"...

Enjoy that while it lasts. United is moving to a BYOD system where you use your own phone or tablet to watch in-flight entertainment. The new cabins have removed all screens and armrest audio systems (oh yeah, and headphones too)

http://www.united.com/web/en-US/content/travel/inflight/ente...

United are cheapskates; they rank slightly above Spirit Airlines in my book.

And at least I can get good games on my Android tablet. The ones on Virgin America flights are shitty SDL ports of old arcade and puzzle games with glitchy graphics.

Those "shitty SDL ports" are open source games written 10 to 20 years ago by one guy, for fun. Trash talking them is somewhat uncalled for.

Hilarious.

That's why the key is not having any expectations.

Honestly, I prefer that anyway. I've got no shortage of devices with plenty of my own media, and now I don't have to be stuck 12" from a screen I can't reliably turn off, that will be shining advertisements and redundant safety lessons in my face when I'm trying to sleep.

Yeah the screens suck, but BYOD with no in-Seat USB charger sucks.

Just buy a 10-20Ah portable battery and you're set for mobile devices. I can weather a 10-12h flight with one of those and my iPad/iPhone. If you have a recent laptop, you should be able to weather 5-8hr for work; I seriously doubt you could get better on even an international flight.

Extra bonus is having the battery available the rest of the time. My phone's battery life isn't quite what I'd desire, so I just keep a spare ~10Ah battery in my purse. It gets used maybe once a week at most, but it's worth it for those occasions.

But do they provide charging ports or outlets?

On some planes, mostly in the Economy Plus areas. Eventually all will have power outlets but, knowing UAL, it will be a very slow process. Your best bet is an international flight.

In seat electronics adds a couple pounds and inch or two of seat width. Either saves the airlines a lot.

This is the new IFE box on the Boeing 737-800. It's massive.

http://si.wsj.net/public/resources/images/BN-HO911_0325mi_M_...

> Now it's touch screen "entertainment in-flight systems." Not like any of those things have made the flying experience any better.

I couldn't disagree more. A fourteen-hour flight with in-flight movies is vastly superior to a fourteen-hour flight with the back of the seat in front of you.

Well, we've had movies on airplanes for a long time. And I agree it makes things marginally more bearable.

But just because they've moved it from a shared television on the aisle/ceiling that everyone had to lean out to watch from to a little touch-screen in front of a chair hasn't really changed the fact that flying is a waste of time. And very uncomfortable.

You didn't say flying was a waste of time. You said the experience hadn't gotten any better. Those aren't related ideas.

Uh, a bad experience is a waste of time.

And I'd call these opinions, not ideas.

Not sure if I agree with being downvoted but out of my hands. :)

It's not a waste of time if it gets you where you want/need to go.

You're being downvoted because you said flying is a waste of time, which is banal to the point of trolling.

Cheapest is the main variable but when it's a reasonable difference (probably under 10%) I'll choose based on flight experience expectations - planes,food, entertainment, wifi, FF program etc. Personally I wouldn't write off the customer value of these add-on segments.

GoGo is quite aggressive about variable pricing. An all-day pass is $16 if you buy it ahead of time, but if you buy it on the plane it can cost up to $50. They also do split testing of their prices and discriminate based on the user agent.

They charge lower prices for mobile devices, so an easy cost-saving hack is to spoof your user agent to look like an iphone or android device.

Also, if you have an AMEX Platinum you get 10 GoGo passes (per year, I think)

That's only the corporate card, not the consumer one.

The consumer one does have Boingo access, though, which can come in handy.

Is Gogo vs Boingo basically business vs consumer? Or..?

I just realized I never realized they were different, since the name is so similar.

I believe so. Boingo is also used on the Washington state ferries. Its horrible - looking at $16 for internet for a (up to) 30 minute ferry ride.

I believe Boingo has hotspots on the ground only.

You can get the Amex small business platinum card (I have one) without having to show any actual business registration proof. It's $400/year, but you get the 10 GoGo passes, free Boingo, $200 credit in various airlines fees (excess baggage fees, etc.).

You also get access to Delta lounges (when flying Delta) and Amex Centurion and Air clubs at airports that have them.

If you travel regularly it's worth it.

All of this seems predicated on the assumption that no work or fun happens without continuous internet service. Why not download and queue up your work/entertainment ahead of the flight? I look forward to digging deeply into something for a few hours without the notification hail and temptation to browse the web aimlessly.

Also, it bears repeating that Gogo issues fake SSL certificates to intercept their users' encrypted traffic.

http://www.symantec.com/connect/blogs/gogo-inflight-internet...

Because our Android devices and web apps are really bad at proper offline sync.

I find the $20-35 well worth it. I look forward to the day when wifi becomes standard on all flights. In the meantime, as a quick protip, you receive complimentary Gogo (at least on AA) with a business Amex Platinum. See http://ir.gogoair.com/phoenix.zhtml?c=251827&p=irol-newsArti...

Sounds like you're the article's model customer -- the person who doesn't mind paying exorbitant prices because they own a business credit card.

Well, it's always been the case that people who are seen to be wealthy/"big spenders" actually don't have to spend so much because they get things comped. Higher-tier credit cards have a history of these kinds of perks, with airline-partner deals on those cards covering everything from lounge membership to in-flight wifi to refunding the application fees for trusted-traveller programs like Global Entry.

And if you're getting that stuff comped, why would you complain about how much it costs someone who doesn't get it free?

I have no business and have three business credit cards. What's your point?

Works for personal platinum Amex as well.

Between my $200 in airline credit yearly, comp' Boingo/Gogo wifi, airport lounged, etc, its worth the $450/year annual fee.

Do you have a source regarding Gogo wifi w/ a personal Amex Platinum? I'm fairly certain that only exist on Biz Plat, unlike Boingo.

Looks like you're right and I was mistaken. Boingo access only for personal platinum Amex, Gogo AND Boingo for the business platinum Amex.

Here is what seems a recent list of airline which provide inflight wifi.

http://blog.edreams.com/in-flight-wifi/

I was hoping for an explanation of how airlines globally price customer internet access out from a business perspective; instead I got a hodge-podge of quick reviews from a customer perspective of airlines in the US only. Typical... a better title might be 'In-flight wifi by carrier (US only)'

Paying for wifi: So airlines in America is giving not giving great customer service. What else is new?

Meanwhile in Europe low-cost carriers like Norwegian offers free wifi on most flights.

Meanwhile in Europe low-cost carries like Ryanair charge fees for not checking in online or not printing your boarding pass at home.

I really don't think this is a Europe-vs-America issue.

1) I don't think anyone else than Ryanair does that. I do agree they suck though.

2) It is an American issue. Have you been on any airline from Europe, Middle East or Asia? If you generalise the offerings and compare the level of service then you will find that American airlines offers much lower service. Most European airlines are quite good, and most big carriers from Asia and Middle East are much better.

Norwegian makes you pay for water.

Seems fine by me, since I can bring my own water but not my own WiFi :)

The TSA would have a field day with all your cavities if you try to even so much as bring more than an ounce over three through airport security. Good old USA!

You bring an empty water bottle and fill it up at the airport. I've never seen an airport that charges for tap water.

Yeah, either fill it up or buy in the shops after security, which (in my experience) is still cheaper than in the plane.

It's the same situation on both sides of the Atlantic. Both JetBlue and Norwegian are low-cost carriers and offer free Wifi while the big flag carriers charge for it, if it's even available.

Really? They're all bad, but we're going to go ahead and argue over who's less bad? Come on...

If you pay up for a given amount of megabytes of transfer, what is the risk that someone else can wireshark up your MAC, clone it and overrun your quota?

It seems claer that the main customers are businesses (or employees). Even if I am footing the bill myself because I am a contractor, rather than expensing it, it still makes economic sense. By having Internet on the plane and working, I am making productive use of dead time. And exchanging even $40 when I can bill 3x that or more is a no brainer.

Don't get me started on the benefits of the internet on flights when travelling with kids.

JetBlue's WiFi is still free? When is that supposed to change?

I read about their Ka band transition, but thought the free connections were for a limited time.

Although I don't work remotely, I can get most of my work done from my laptop even with very low bandwidth wifi. So even $35 for a 6 hour flight is a good deal for the company considering I'm getting hundreds of dollars worth of work done. I even pay out of my own pocket when I'm not traveling for work, since if I'm not doing anything else I might as well do work.

I know of two cost-saving measures for Gogo:

1.) Buy your pass on the ground first and it can be half the price.

2.) Some Delta flights offer free video streaming to devices via a Gogo app. Simply click the link that says "I need to download the app" and the internet switches on so it can redirect you to the AppStore. Switch back to a browser and it still works....

Never pay for wifi. This isn't primarily a budget concern, it's just that it's almost always far worse quality than free wifi. And hotel wifi is always worse than hostel wifi

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