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August 06, 2008

Spurred by Rising Fuel Costs, Struggling Airlines Eye In-Flight Internet Service



By Michael Dinan
TMCnet Editor


In-flight broadband Internet service is coming to its first major U.S. airline, the Washington Post is reporting today, in a competitive move that’s expected to spread through other airlines and generate millions for an industry that’s suffered from high oil prices and limited travel.

 
According to Post Staff Writer Sholnn Freeman, Delta Air Lines could start offering in-flight Internet serve as early as October, for $10 on flights three hours or less and $13 for longer flights.
 
“If they charge for it, they are going to make millions and millions of dollars,” Mike Boyd, an aviation consultant, told the venerable newspaper. “Most of us cannot be away from the Internet or our laptops for very long. We get separation anxiety when we are not on the Internet for a few hours.”
 
Those “millions and millions” are a scarce and sorely needed incentive for the airline industry, which has seen staff and service cutbacks around the world, as rising fuel costs hit the travel industry hard.
 
According to the International Herald Tribune, more than two dozen airlines have shut down this year, filing for bankruptcy, reducing operations to a bare minimum or restructuring as charter flight companies.
 
The paper’s reporter, Caroline Brothers, says that the 17 airlines that have already closed is more than the industry normally sees in a year.
 
“Each region has its own challenges but the common denominator in the last six months is the price of oil,” Anthony Concil, a spokesman for the International Air Transport Association, told Brothers. “If the business is not doing well, the price of oil is the critical factor in pushing these carriers out of business.”
 
The addition of in-flight broadband Internet services is seen as a good investment for airlines, in part, according to the Post, because it’s seen as cheap and easily deployed.
 
According to Mike Miller, an Orlando-based aviation consultant that the capitol’s paper interviewed, complete in-seat entertainment systems are costly and difficult to maintain.
 
“And wireless has its own advantages,” the Post writes. “He said WiFi (News - Alert) access will help passengers cope with delays on flights – giving them something to do. The in-flight Internet option is unlikely to pacify passengers who are angry about higher ticket prices and charges for sodas and snacks. But analysts say it will add an important revenue source for financially strapped airlines. Ramped up Internet service comes as airlines are not only charging for drinks but also adding baggage fees and fuel surcharges to stem losses from high oil prices.”
 
Delta is promising to roll out the service on its entire fleet of 330 domestic aircraft by next summer, including 75 by the end of this year.
  
Don’t forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users. Today’s featured white paper is The Compelling ROI Benefits of Contact Center Quality and Performance Management Technologies, brought to you by Voice Print International (News - Alert).

Michael Dinan is a contributing editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Michael’s articles, please visit his columnist page.

 

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