Friday, September 20, 2013

“Airplane Wi-Fi Gets up to Speed”




“Airplane Wi-Fi Gets up to Speed”
http://online.wsj.com/article/SB10001424127887323864604579067473301551790.

Published September 11, 2013

As the technology on the ground is getting more advanced, the demand for the Internet on airplanes is growing. Gogo Inc. plans to unveil an Internet system that combines satellites and cellular towers to connect airplanes six times faster than current inflight Internet providers. Gogo is the largest provider of Internet for airplanes in the US. The struggle for airplane companies now is the question of price and speed. Virgin America Inc. is planning to install this high-capacity inflight WiFi on its airplanes, however Virgin America Inc. plans to incorporate the service in 2014. On the other hand, JetBlue Airways Corp. will do so in 2015, with little to no charge, contrary to Gogo.
imageGogo has options of $14 one-day passes and $50 monthly passes for inflight WiFi. JetBlue has stated that they will initially allow the basic Internet use free of charge. Although nine out of ten flyers believe the Internet should be available inflight, only 6% of customers currently purchase Internet on flights. This could be due to the slower speeds as more users connect to the Internet. Gogo’s new service is to provide speeds of 60 megabits per second to each airplane, which is a significant increase from the 3-10 more flights are currently using.

It seems that most customers would enjoy having Internet access inflight, however independent consultant from Kansas Jason Cupp has conflicting views. “On one hand, its 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,” Cupp said.  In a global aspect, technology as Gogo is presenting would benefit many business-oriented people who constantly have to fly for business. This technology, if done correctly will only enhance the flying experience for both the pleasure and business travelers. Inflight Internet would allow for a CEO flying New York to London to be in constant communication with his office in London before arrival. 
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Although Gogo has stated that they have lost $70.5 million in the first half of this year, Gogo’s revenue is projected to increase to $500 million in the next three years. When the Internet is up to speed, US airplane companies should also consider the advantages they would have over other international airplane companies. Gogo has essentially found a great niche in a very competitive industry and should look to expand its expertise internationally. If Gogo were to expand internationally, they should consider and current competition and barriers to entry before investing in a country and losing another $70 million.  Additionally, creating the services that is virtually free as JetBlue, would also make Gogo much more competitive in the international markets.

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