Thursday, December 20, 2007

Conversation with Aircell Senior Management

For some time I have been talking about ubiquitous computing and the always connected traveler. I just received a briefing from the senior management of Aircell about their plans to implement Wi-Fi connectivity on commercial aircraft. Back in 2001 the buzz about this subject concerned the Boeing Connexion roll out with Lufthansa airlines. Last August Boeing announced that it would be discontinuing the Connexion service. So why will Aircell succeed where Boeing failed? It is all about the technology and business model. Boeing's Connexion equipment was expensive and heavy (1,000 lbs) and needed to be installed when the aircraft was taken out of service. Aircell's technology is lighter and can be installed while the plane sites at a gate overnight. Apart from this advantage, Aircell also has a business model where the airlines share in the revenue (the cost for consumers will be equivalent to Wi-Fi connections in hotel rooms). American Airlines and Virgin America are the two launch customers. In the case of Virgin America the technology will be integrated with the seat back screens allowing all customers to browse the Internet even if they don't have a laptop or PDA. This always connected environment fits well with the airlines' need to sell ancillary services on board for additional revenue sources. In addition, the opportunity to communicate with their best travelers on the aircraft provides some unique CRM capabilities which will likely surface as the Aircell connectivity becomes common place.