August 5, 2008

Aviation Broadband Won’t Fly With Per Flight Pricing

While in-flight connectivity announcements from Southwest, Alaska, Virgin America, JetBlue, and American Airlines have been covered extensively in the press, the aviation broadband industry has been 12-18 months away from large deployments for the last seven years. And while some airlines have delayed airborne Internet for customers, many others have installed wireless access points across their fleet for FOQA (Flight Operations Quality Assurance). But in order to bring cabin communications up to the level of crew operations, service providers will need to develop new pricing structures, according to a new report from Freesky Research.

"If the airline broadband industry wants to move beyond the wait 'til next year philosophy that has defined it since 2001, it needs to lose its fixation with per flight pricing," according to David Gross, author of the report. "Either it needs to charge exceptionally high per minute rates like providers serving business jets and cruise ships do, and serve a high-end niche only, or move to subscription services like most terrestrial hotspot services. The mushy middle approach of charging more than a ground service, but less than a business jet service will neither attract the mass market, nor maximize revenue among price-insensitive travelers."

In addition to pricing, this study, titled Aviation Broadband Networks: 2009-2012, looks at technology developments and economic issues driving the growth of data services on both business jets and airliners. It is available for sale now, and includes forecasts for both satellite and air-to-ground services.

About Freesky Research

Based in the Washington, DC area, Freesky Research is an industry analyst firm covering data communications in air & space.