Yeah, it seems that beating up on Aircell and the adoption of their gogo in-flight internet service seems to be a recurring theme in the industry. But that doesn’t mean that it isn’t possibly deserved. There are a ton of questions out there about just how bad their cash flow situation is. And the answers and information coming out of Aircell doesn’t seem to be helping their cause.
Runway Girl, as always, has some great information on this issue in a recent post: Does Aircell get an average six users per flight? – Runway Girl. Here’s the gist of it. Aircell is claiming 100,000 users per month, which sounds like a big number. But when you divide that out by the over 600 planes in the air with Aircell service and an average of 4 flights per plane per day the numbers are much more worrisome. The math works out to six users per flight. Just six. Considering that they are likely eating the whole cost of the installs and potentially also sharing revenue with the airlines that number just isn’t sufficient to sustain the service.
Sure, things are looking up right now with the expectation of much higher adoption this holiday season. That is due, in large part to the fact that it is free on many carriers. American Airlines, Delta and Virgin America have all struck deals of various sorts for free access (the Virgin America one is, by far, the most broad). And users definitely seem to be enjoying the service. On my recent Virgin America flight there were definitely more than 6 users online but the overall user experience suffered for it.
If the company cannot get sufficient demand at the appropriate price point such that they are going to be profitable then they are in big trouble. If they get that demand but the performance stinks they’re in an even worse position. It is hard enough to attract customers to such a service. Keeping them after a bad experience or three where the costs are not trivial is going to be pretty difficult. I fully admit that one experience does not make a trend, but I’m still worried for them.
No matter which way you look at it the future of in-flight internet is, at best, a hazy proposition. And Aircell is the fuzziest of them all since they’ve got the most exposure right now.
The problem with free in-flight internet
Free in-flight wifi on American Airlines
Great news for in-flight Internet
Aircell looking for government $$ to help their gogo go
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It seems they need to find a price point somewhere between the too-expensive currently used ones and $0 to get just enough (but not too many) users.
How much are they experimenting with their pricing scheme? Going "free" seems dangerous. Why not something like $2/hour of flight time?
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