NY Times Re-Prints Self-Serving Airline Wi-Fi Survey and Calls It News

Joe Sharkey’s column in today’s NY Times discusses how Wi-Fi is going to be huge on airplanes, despite current evidence showing usage rates below 10%.  The basis for the counter-intuitive finding?  A survey (or “survey”) conducted by the Wi-Fi Alliance, an industry trade group.  You’ll be shocked to hear that:

About three quarters (76 percent) said they would choose an airline based on Wi-Fi availability. More than half (55 percent) said they would shift a flight by one day to get on a plane with a Wi-Fi connection…Half of the business travelers said they sometimes took a red-eye flight because flying during the day, without an Internet connection, rendered them unreachable during business hours.

76% would choose an airline based on Wi-Fi availability?  Really?  10% of passengers use wi-fi, but 76% said they’d choose the airline based on whether they had it.  Hm…

I’m quite disappointed that the NY Times would print the results of a self-serving trade group “survey” as news — they should certainly know better.

I worked for a short time for a direct marketing firm (ie, “junk mailer”) and I remember seeing this beauty of a “survey” from Pitney Bowes that basically found that 3x as many people preferred receiving junk mail from companies than emails from companies.  Bring on the junk mail!

You can get a survey to tell you anything you want, and perhaps an industry publication will print it.  But when the NY Times is passing off fake surveys as news, something is wrong.

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  1. It’s always difficult to figure out what people will pay for. I remember being in Seattle during the early days of Starbucks and thinking it would be a fad. After all, why would folks pay a couple bucks for a coffee that, candidly, didn’t taste much better than what they could get at the office for free, or easily brew at home for a fraction of the cost. Similarly, the sudden explosion of environmentally-unsound bottle water sales took me by surprise (although it seems like that may now be reversing).

    So that gets us to on-board internet sales. I’ve always thought that if a business traveller could “expense it,” you could get 10 bucks from many of them. The idea being that many would do a few minutes of work and then surf away for personal use (human nature being what it is).

    Of course, the large majority of travellers these days don’t have anyone picking up their on-board internet tab. I believe the VAST majority of these travellers will not pay $10, $12 or $14 to surf. Most of us can easily live without internet access for a few hours. It’s mostly a form of entertainment. What would you pay for an on-board movie? I think the fee has to be around 5 bucks to get any significant leisure business. Above that, fuggetaboutit. Especially since there’s still this pervasive belief that “the internet should be free.”

    I had never been on an airplane with internet access before this summer. Now, suddenly, it seems to be available on half my flights. Each time it’s offered, I’ve looked around to see who’s using the internet. I found no one. Admittedly, all of these flights were less than 2 1/2 hours.

    So my best guess is that this technology will be only marginally more successful than the in-flight phone, unless the user fees are substantially reduced. If airlines GAVE IT WAY, everyone would be surfing (but then everyone would have to give it away, and nobody would make any money!).

  2. They’re going to have a very, very difficult time re-couping their costs. That’s not to say that wi-fi is a bad idea – hardly. It’s just at this point people are not particularly willing to pay $12 (or whatever). Remember, that a couple of years ago a number of airlines tried to get $30 for in-flight Internet access. They’ll figure out the pricepoint (it may be free…but that doesn’t seem right either) . I imagine we’ll see subscriptions, or bundles (ie, a sandwich and internet access, $12). I think they want people using the service – the bundle feels like the right way to go…

  3. I guess bundles might work, but I think the first discounting we’ll see is with special access codes. Didn’t AMR just distribute some discount codes? This strategy has 3 main benefits: 1) it gets folks to at least try the new service; 2) it enables the providers to price discriminate — getting new price-sensitive customers who won’t pay 12 bucks’ and 3) it puts some badly needed money in the providers’ pockets.

    BTW, am I correct that the major airlines have put the entire risk on the providers’ shoulders? Like the airlines did not put up any money to get the equipment installed on their aircraft. That would be a great move on the airlines’ part. Get wifi on board, pay nothing, collect some cut of the pie if it works out.

    Not so good for the pie-in-the-sky investors in the new technology, of course!

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