Gogo's fee-based Wi-Fi misses a big opportunity
Long flights are an ideal time to get some work done. You have hours to kill, few interruptions, and little else to do aside from taking a nap or reading a book. Thanks to in-flight Wi-Fi services like those offered by Gogo, you can even stay connected as if you were on the ground. But it will cost you.
Gogo allows you to connect your devices to the onboard wireless network, which communicates with Gogo’s towers on the ground, which route the connection to the Internet and let you surf the Web while traveling hundreds of miles per hour at cruising altitude. Now, Gogo is also adding the ability to use text messaging and place voice calls from a flight.
Unfortunately, the cost of such luxuries is lofty. According to the Gogo website, an all-day pass costs $14 for 24 hours of continuous access. Once you connect, your 24 hours starts ticking away. You can’t use an hour now and three hours next week. You also have to use all 24 hours of the service on the same airline.
There are other plans available. A flight I was on recently offered me Gogo in-flight Wi-Fi for $10, but it was for only 90 minutes of service. There is also a Gogo Unlimited plan that offers unlimited Wi-Fi on all Gogo-equipped flights for $50 per month, which might be a good value for folks who spend more time in the air than on the ground.
But Gogo—and by extension the airlines Gogo works with—are missing a huge opportunity.
According to data from Gogo, only about six percent of the customers on a Wi-Fi equipped flight take advantage of the service. With about 160 seats on a Boeing 737, that means roughly 10 customers. Assuming $10 per customer on average, that would mean about $100 of revenue to be split somehow between the airline and the service provider.
They could more than triple the revenue, and exponentially improve customer satisfaction and the brand reputation of the airline, by simply charging $2 more per customer for the flight itself, and providing the DirecTV or Gogo Wi-Fi services as a “free” benefit. Heck, most people spending hundreds of dollars on a flight probably wouldn’t even balk at an increase of $5.
Passengers are sick of being nickel-and-dimed. You used to at least get a bag of peanuts or pretzels when you traveled. Now the airlines want $3 for a miniature can of Pringles. Baggage used to be included in the price of a ticket, but now airlines want $25 or more per bag for the privilege of bringing luggage along. And you can no longer freely choose a seat on a flight—you have to pay a fee for a window seat, an aisle seat, or a seat with a little extra legroom.
Gogo, and the airlines are going about this all wrong. They should stop charging individual customers for Wi-Fi and instead negotiate an arrangement between them that lets the airline provide the service to the entire flight as a benefit of flying with that airline.