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The Inflight Connectivity Conundrum

By Chris Moore, Former EVP & CIO, Sun Country Airlines and CIO Consultant, Freelance Consulting

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Chris Moore, Former EVP & CIO, Sun Country Airlines and CIO Consultant, Freelance Consulting

While on an Alitalia flight from New York to Rome last month, I decided to take a break from my grinding, persistent insomnia (I cannot sleep on planes for whatever reason) to check out the in-flight connectivity offerings. At that point, in the flight we were about one thousand miles southwest of Iceland and well into the zone that was known as the “Mid-Atlantic Gap” during World War II. During the war, that term described an area in the North Atlantic that was beyond the range of land-based aircraft used to protect Allied shipping lanes. More recently, beginning in 2005 or so, this term was used by seasoned international travelers to describe the entire four or five hour journey over the Atlantic Ocean where there was no ground-to-air connectivity for the airline passenger. Now, just a few short years later, as I connected my devices to Alitalia’s WiFi (for a price of 40 Euros), I marveled over the dramatic improvements in air-to-satellite coverage, speeds, and reliability offered by the airlines and their satellite partners.

The fact is that all consumers expect—and frequently demand—some sort of WiFi connectivity option nowadays, regardless of where they may be: in a coffee shop, at a national park, or on an airplane that is 35,000 feet in the air. Further, these consumers own multiple PEDs (Portable Electronic Devices) with apps that have increasingly voracious data appetites. And here is another emerging trend: American consumers expect that WiFi connectivity option to be free or very nearly free. Interestingly, European consumers still expect to pay a premium for WiFi connectivity, but even that is slowly changing although Europeans still gleefully expect to pay for using public restrooms, which is unheard of in America these days (show me a pay toilet in the USA and I will show you scuff marks from people climbing over the door).

"Meanwhile, the data demands of the passenger are exponentially increasing, and saturated aircraft bandwidths are causing some unfortunate customer service problems, many of which have been luridly covered by the media"

For most businesses, this consumer expectation can usually be met with a very modest investment. For an airline, however, the investment required can be in the millions—or hundreds of millions, depending upon the size and complexity of the aircraft fleet—and the risk suddenly rockets into the stratosphere considering that the average “take rate” for consumer-paid in-flight WiFi access is about six percent, meaning that on an aircraft with 175 passengers only 10.5 of them will pay for the service. These are some sobering numbers because most of the airplanes in service today will be enjoying their retirement years in the Arizona boneyard by the time that ROI becomes positive. On the other hand, when in-flight WiFi is offered as a complimentary service, the “take rate” is in excess of one hundred percent (this is possible because each passenger can have two or more PEDs they are connecting), and the bandwidth, especially with ground-to-air systems, can quickly become saturated thus resulting in a poor user experience.

While we have our share of business travelers, Sun Country Airlines is a leisure and charter airline with a very loyal customer base that chooses us because of the overall experience. We offer a high level of in-cabin and ground service to our passengers, and while we have competitors, of course, we don’t have a competitor that has our exact same offerings. Sun Country Airlines is still small enough to experiment with routes, destinations, and offerings, but the reality is that when the heavy-hitters in our industry (American, United, Southwest, and Delta) sneeze, we catch cold just like every other airline in the world. So, when the heavy-hitters first starting offering in-flight WiFi a few years ago, we knew that Sun Country would eventually have to offer it as well at some point.

Sun Country has in many ways benefitted from not entering the inflight WiFi connectivity arena too early. While there are clearly advantages to being the first one to the market with an innovative offering, these advantages can be short-lived and sometimes turn into disadvantages. For example, several of the large airlines that invested early are now facing the unpleasant and expensive prospect of re-equipping their large fleets with newer inflight WiFi components because the advances in satellite bandwidth and speeds have rapidly outpaced the capacity of the older onboard physical devices, which are not backwards-compatible. Meanwhile, the data demands of the passenger are exponentially increasing, and saturated aircraft bandwidths are causing some unfortunate customer service problems, many of which have been luridly covered by the media. Additionally, the initial investment costs for an airline to “get into the connectivity game” have dropped dramatically (almost fifty percent just over the past three years) as more suppliers have entered the market to grab share with better products and services.

Sun Country has also been able to learn from the trailblazers and the ever-evolving consumer behavior with this technology and offering. The assertion for some at Sun Country has traditionally been: “We don’t need inflight WiFi because we are a leisure airline.” I probably would have agreed with that statement five years ago. Today, however, we know that most employees are expected to be connected to work most—if not all–of the time, regardless of whether or not they are in the office, at home, or thousands of miles away enjoying a really nice Caribbean vacation. This means that leisure travelers, just like business travelers, are increasingly bringing not only their work but also their entertainment with them everywhere they go on their PEDs, and they are insisting on more connectivity with higher bandwidths and speeds. The hypothetical line that separated the needs of the leisure and business traveler is becoming more and more blurred.

Sun Country will complete this interesting journey called inflight WiFi very soon. However, before we arrive at that destination there are some formidable obstacles that have to be overcome, as I have indicated here. But I think the main question for Sun Country, as it relates to inflight WiFi, is no longer “why?” but is instead “how?”

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