Board the plane, turn off your phone ... and surf the Web

American Airlines and Virgin America plan to offer wireless Internet next year, and other airlines will be watching the results closely.

from the October 9, 2007 edition

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AirCell, which is servicing American and Virgin America, is using a ground-based technology that accesses existing cell towers. Row 44, which will provide broadband access to Alaska Airlines, is using a satellite-based system like that in Boeing's Connexion. Row 44 executives tout their system as better because it will work over water.

"We can go where land is not, so we can provide service over the oceans for example," says Wendy Campanella, director of business development at Row 44, which is based in Westlake Village, Calif. "We don't have to build any ground infrastructure."

But AirCell's executives are just as adamant that their system is superior because it uses the vast network of cell towers already in existence.

"There's absolutely no way you can provide as robust, cost-effective, or as good broadband service using any other technology," says Jack Blumenstein, president and CEO of AirCell, which is based in Colorado and Illinois. "It's simple: If you can communicate with a cell tower that's five miles away versus a satellite that's 38,000 miles away, there's absolutely no choice about which is going to be the lowest-cost, most effective, technology."

That said, AirCell plans to eventually provide satellite service for overseas flights.

Such fierce competition is also evident in airline industry itself. That's in part because the carriers operate on very thin margins. The profitability of a flight can be determined by just a few passengers per plane. And so airlines work very hard to engender loyalty in their customers. And since many passengers want Wi-Fi, and would be willing to switch airlines for it, the race is on to be wireless in the sky.

"If less than a single percentage of passengers changed from one airline to another, it would have an enormous impact on profitability, particularly if they're a high-value business traveler," says Mr. Blumenstein.

Executives at American say they're "excited" about the opportunity to test the system, which will allow customers to use their laptops and personal digital assistants.

"We'll be testing this on 15 planes when fully implemented: They are the 767-200 class fleet that is chiefly used for transcontinental flights," says Charles Wilson, managing director for external communications at American Airlines.

Virgin America plans to integrate broadband into its existing seat-back entertainment system on all its Airbus A320s. That way passengers wouldn't even need to bring a computer.

"You could access your e-mail from a seat back: Every one of our handsets already has a 'www.' button," says Charles Ogilvie, Virgin America's director of in-flight entertainment.

Eventually Virgin America passengers will be able to log in with their frequent-flier number, and things will pop up like their playlists and chat names.

Both companies say there will probably be a charge for the service, except for first-class passengers. The amount hasn't been settled upon, but it's expected to be about $10.

As for passengers concerned about cellphones in the sky, there¹s no reason to panic, at least not yet. For now, sky-high cellphones are still banned by the Federal Communications Commission. And American Airlines plans to disable voice-over-Internet options, such as Skype, so passengers don't have to worry about being an unwilling captive audience to one side of someone else¹s private conversation.

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