Source - http://online.wsj.com/
By - JACK NICAS And ANDY PASZTOR
Category - Vacations In Santa Clarita
Posted By - Hampton Inn Santa Clarita
The race for fast Internet at 30,000 feet is accelerating as airlines
roll out new technologies and speedier connections—offering more
productivity for business travelers but also encroaching on a rare
refuge from the wired world.
Gogo Inc.,
GOGO +10.78%
the largest provider of inflight Internet in the U.S., on Wednesday
plans to unveil a system that uses a combination of satellites and
cellular towers, connecting airplanes to the Web at speeds six times as
fast as its current best option.
Virgin America Inc. will launch
Gogo's new inflight Wi-Fi service in the second half of 2014 and says it
expects to eventually upgrade its 53 aircraft with the product.
That comes after JetBlue Airways Corp.
JBLU -2.04%
received government approval last week to install a new high-capacity
satellite link on many of its aircraft, an inflight Wi-Fi solution that
can support streaming video to fliers' devices from Netflix Inc.
NFLX -1.52%
and Hulu, among others.
JetBlue, which has lacked inflight
Internet, plans to launch the service on some aircraft this year and
equip its entire fleet of 180 aircraft by the end of 2015.
Gogo sets the prices for its onboard Wi-Fi, with options including $14 one-day passes and $50 monthly passes.
JetBlue said it is reviewing pricing for the service, but that basic
Internet use initially will be free, while the airline will charge
fliers for streaming content, which uses more bandwidth. Other airlines
that provide Wi-Fi currently block access to streaming services like
Netflix, to avoid cannibalizing their own fee-based inflight
entertainment.
The new technologies could mean Internet speeds in the air that are
at least as fast as the average Internet speeds for Americans on the
ground—something that could help break down flier resistance to paying
and make the service profitable.
Almost nine of 10 U.S. fliers said they think every flight should
offer Wi-Fi, according to a survey of 2,000 people released last week by
Honeywell International Inc., which makes equipment for providing
in-flight Internet. Yet Gogo said about 6% of potential customers
currently purchase its Internet on flights.
Tim Farrar, a Menlo Park, Ca., satellite-industry
consultant, said the same lower-than-expected percentage has generally
held steady across the industry, "there's no indication of any dramatic
shift" on the horizon and the trend could impede the swift growth that
Gogo and rival services foresee.
Some blame pokey speeds for that gap between desire and purchase.
Fliers must share bandwidth, meaning that speeds slow when more
passengers log on. David Cush, Virgin America's CEO, said that on
average flights, about a fifth of its fliers pay for Wi-Fi, but that "it
starts to top out at 30 to 35 users very simply because response time
starts to degrade."
Gogo says its new service will offer speeds of 60 megabits per second
to each airplane, compared with 3 mbps on its original Wi-Fi
connection, which 1,700 aircraft still use, and 10 mbps on an updated
product launched last year, which about 300 aircraft have. Panasonic
Avionics Corp., which provides Wi-Fi to about 2,000 aircraft
internationally, says its speeds now average 5 mbps to 10 mbps.
The average Internet connection on the ground in the U.S. is 8.6
mbps, according to Akamai Technologies Inc., a network operator.
JetBlue is connecting its aircraft via ViaSat Inc.'s
VSAT +1.21%
satellites, the first time a commercial airline will use the
higher-capacity Ka-band satellite spectrum, which some in the industry
see as the future of inflight Internet. Gogo intends to use a different
constellation.
JetBlue said its new service would provide speeds
of 12 mbps to each flier's device—not just the airplane, like on other
providers. That model means "almost everyone on the airplane can enjoy
that, not just one or two," said Don Buchman, ViaSat's director of
mobile broadband.
Consultants said that JetBlue may be able to deliver high speeds to
each device if several dozen fliers are just surfing the Web, but if
users gravitate toward more bandwidth-intensive applications, JetBlue
may find it hard to meet expectations.
Flights have been one of the few places that require people to unplug
for a few hours. But since 2008, when AMR Corp.'s American Airlines
flew the first Gogo-equipped commercial aircraft, the U.S. airline
industry has rapidly expanded inflight Wi-Fi, connecting nearly 2,500
aircraft over the period.
Today, nearly 60% of commercial passenger aircraft in the U.S. are
connected, not counting commuter jets, according to a Wall Street
Journal survey of the nation's 12 biggest airlines. That compares with
about 35% two years ago. By the end of 2015, the airlines plan to have
more than 85% of their mainline aircraft connected, including virtually
all of the larger jets flown by the nation's biggest carriers.
"It's bittersweet," said Jason Cupp, an independent management
consultant from Kansas City, Mo., who took about 150 flights last year.
"On one hand, it's good because I get a lot of work done. On the other,
[a plane] is the only space in literally my entire life where I'm not on
the Internet."
Matt Nevans, who travels more than 200,000 miles a year
helping local governments set up email systems, said he is a loyal flier
of United Continental Holdings Inc. But in recent years, as United was
slow in adding inflight Wi-Fi, "I chose other airlines because I knew I
needed to be online" during the flight.
United expects to add Wi-Fi to 200 of its 700 mainline aircraft by
the end of the year, from 90 now, and to be fully equipped by the end of
2015.
"It's been a long time coming," Mr. Nevans said.
Various foreign carriers have tried to focus on business travelers by
maximizing connectivity on long-haul and intercontinental runs. But in
some cases the revenue hasn't been as hefty as envisioned, according to
industry consultants, partly because many of those trips are overnight
flights. There also are signs that short-haul flights may not be
conducive to streaming video. Southwest Airlines Co. which specializes
in such flights, originally agreed to have Row44 Inc., is a unit of
Global Eagle Acquisition Corp., provide such content for a fee. But at
least temporarily, the connectivity is now being provided free of charge
as long as users watch a brief advertisement for sponsor
satellite-broadcaster Dish Network Inc.
Gogo posted a loss of $70.5 million in the first half of this year.
According to Mr. Farrar, Wall Street analysts expect Gogo's revenue to
climb to about $500 million over the next two or three years from an
estimated $300 million in 2013. But plans to enhance Gogo's hybrid
network will cost hundreds of millions of dollars over the same period,
according to industry consultants and analysts.
Jimmy Schaeffler, who runs satellite consultancy the
Carmel Group, said hybrid satellite and land-based systems "still may
have to contend with quality issues stemming from clouds, weather
systems and other factors."
