This is Why Your Airplane Wi-Fi is Not Worth the Money

Airplane interior, seats

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You’ve paid good money for your airline ticket, and chances are you’ve paid extra for your bags, too. In the growing realm of a la carte airport pricing, there’s very little you don’t pay for anymore — including your Internet connection.

Though many airports allow you to access free Wi-Fi in exchange for watching a commercial every 30-45 minutes, the symbol on your devices turns that awful, lonely light gray color once you find your seat in the cabin. That is, unless you’re willing to shell out extra cash to stay connected from the flight attendants’ seat belt demonstration all the way to your final destination.

The rise of mobile technology has increased the expectation that you’re available around the clock — even if you’re jumping on a plane to commute between offices. If you travel frequently for business, chances are your company is picking up the tab, so the only complaint you have is the fact that you’ve only gotten one email to load before the drink service comes through. But if you’re traveling on your own dime, the frustration compounds when the loading time is just as slow, and you’re also watching your credit card bill climb with every flight you take.

Don’t understand why your in-flight Wi-Fi is terrible, even after you’ve paid half of your typical Internet bill during one four-hour flight from JFK to San Francisco? Here’s a few reasons why.

1. Monopolies still exist

Rich Uncle Pennybags continues to stick his head into every enterprise, no matter how obvious it becomes. The Internet industry is no different, as we’ve already seen with Comcast and other service providers we love to hate. The story is no different in the air, but the paying public has a different Enemy No. 1 in the form of Gogo. The service provider controls about 80% of the market and had the perfect timing — it began selling its wares in 2006 and American signed on first, with United, Delta, and more following in its wake.

Other competitors are beginning to come out of the woodwork, but Gogo has the home field advantage.

2. Pricing is an experiment

The evil cycle of business demands today almost ensures that no one wins except the Internet providers themselves. Gogo isn’t the first company to introduce dynamic pricing, in which you pay based on demand or your own unique customer profile. Amazon has tried it, and Home Depot and Sears will target merchandise to specific users.

In the case of in-flight Wi-Fi, where and when you travel determines the premium you’ll pay for the service. Business travelers are legion on the JFK to San Francisco flights during the week, so pricing is about $33 for the flight, compared to the $10 you’d otherwise pay from Detroit to Miami.

Part of this is to cut back on demand, so the users who are paying have half a chance of getting their work done. But the other aspect is that the companies are still figuring out just how much people are willing to pay to stay connected. Gogo increased its all-airline monthly pass from $45 to $60 earlier this year, Bloomberg reports. Though customers complained, revenues increased.

“They’ve found that there really isn’t much limit to what people are willing to pay if they have to get work done on the plane,” said Tim Farrar, an analyst for TMF Associates.

3. Service is still “new”

Perhaps when Gogo didn’t have as much competition, the company was less inclined to research how to improve speeds for larger bandwidth. That’s definitely not the case anymore, but in-flight speeds are still much slower than your typical connection on the ground. Right now, Gogo can give a plane 10 megabits per second of connectivity, which Bloomberg states is about half of the download speed on Verizon’s 4G network. But a large majority of the planes are getting much less than that, at around 3 Mbps.

To remind you how the signals work, that connectivity is shared among everyone who is connected to the network — it’s why you bought the upgraded package in college so you and your three roommates could all stream movies (or do your homework) at the same time. So not only do most planes have connectivity reminiscent of the early 2000s, but you’re sharing it with everyone in your plane — and in the planes flying close by.

Competitors are toying around with satellite technologies that can increase the speeds, but those come at a cost. To install Gogo in most domestic planes in the Unites States, it costs around $80,000. It’s not chump change, but compared to the $400,000 plus $100,000 installation for some satellite services in Europe and other locations, it’s a steal. United already has the Gogo system installed on 85% of its fleet, meaning it’s likely to wait for Gogo to increase its speeds instead of switching right away to a satellite provider.

Free Wi-Fi is unlikely

Though this is likely depressing news for those of you who only travel occasionally and don’t have a corporate expense account, chances of scoring free Wi-Fi during your flight probably won’t happen anytime soon. A few carriers have experimented with the idea in various European flights, and the number of users increased by 5 times the amount of normal demand.

When it’s free, Wi-Fi is used by 30-40% of travelers. When it’s at its normal price, usage plunges to about 5-6% of passengers. And though carriers might want their customers to use the service — they spent good money installing it, after all — it’s a better experience for their business and first-class passengers when fewer people are taking up bandwidth posting pictures on Instagram of the airplane wing. It might seem unfair, but as in all things, those who pay more get more.

Follow Nikelle on Twitter @Nikelle_CS

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