Is the move to free inflight WiFi inevitable? United Airlines seems to think so, with plans in the works to make it a reality. Exactly when and how much remain unclear, but in today’s investor earnings call the company indicated those plans as part of a brief update on the overall product quality.
For the past year or so, we’ve been working towards a goal to get the system to a high enough level of reliability and bandwidth that we can make WiFi free for our customers. We’re excited at the progress we’re making towards that goal.– United Airlines President Scott Kirby
One factor limiting United’s efforts on this front is the poor reliability of the system. A free product is often supported by 3rd party sponsors. Any outside company putting its name on the product wants to make sure that the experience is a positive one. Without that the investment is a poor choice for the companies involved. As part of the prepared remarks in the call United President Scott Kirby highlighted some of the hardware upgrades rolling out across the fleet and the associated benefits the company has seen. The Panasonic Avionics kit is getting a new modem installed, for example, that dramatically increases overall transmission capacity and also enables access to new and higher bandwidth satellites. That upgrade program suffered several delays over the past couple years, but the work appears to finally be moving forward at a reasonable pace.
Also likely helping the improved performance numbers is the addition of more systems with the Viasat solution that is directly managed between the two companies rather than via a third party like the bulk of the earlier installations. Viasat’s shift into the direct market business with its airline customers has delivered significant improvements in airline and passenger satisfaction with the product as it has rolled out in the Americas and Europe. New single-aisle aircraft joining the fleet are all currently expected to be fitted with this system as well. And Viasat has a significant number of aircraft online offering free browsing or streaming levels of WiFi to passengers or complimentary access to various services, proving that it knows how to manage such implementations.
The overall impact of the systems upgrades is showing on customer satisfaction scores, with passenger ratings on the system 20% higher, according to Kirby. He also indicated that refund requests are down by two-thirds, though it is unclear if that was in absolute numbers or as a percentage of connections. He also did not get into details on whether take rates are holding steady despite the company’s admitted poor prior systems performance.
United struggled early with its multiple vendor solution, delivering an inconsistent inflight connectivity experience and price points across its aircraft types. With the overall performance stabilizing – and it is still not perfect; the company knows that – the opportunity to improve the passenger experience further presents itself. Free WiFi would erase a lot of customer confusion around the inconsistent portal experience and other prior issues the systems had.
And, of course, there’s nothing truly standing in the way of the company simply making the service free for everyone today. Still, getting the technical offering and the business plan developed makes more sense than flipping the switch and hoping for the best.