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The Inflight Connectivity Conundrum
By Chris Moore, EVP & CIO, Sun Country Airlines
The fact is that all consumers expect – and frequently demand – some sort of WiFi connectivity option nowadays, regardless of where they may be: in a coffee shop, at a national park, or on an airplane that is 35,000 feet in the air. Further, these consumers own multiple PEDs (Portable Electronic Devices) with apps that have increasingly voracious data appetites. And here is another emerging trend: American consumers expect that WiFi connectivity option to be free or very nearly free. Interestingly, European consumers still expect to pay a premium for WiFi connectivity, but even that is slowly changing although Europeans still gleefully expect to pay for using public restrooms, which is unheard of in America these days (show me a pay toilet in the USA and I will show you scuff marks from people climbing over the door).
For most businesses, this consumer expectation can usually be met with a very modest investment. For an airline, however, the investment required can be in the millions – or hundreds of millions, depending upon the size and complexity of the aircraft fleet – and the risk suddenly rockets into the stratosphere considering that the average “take rate” for consumer-paid in-flight WiFi access is about six percent, meaning that on an aircraft with 175 passengers only 10.5 of them will pay for the service.
Mean while, the data demands of the passenger are exponentially increasing, and saturated aircraft bandwidths are causing some unfortunate customer service problems, many of which have been luridly covered by the media
While we have our share of business travelers, Sun Country Airlines is a leisure and charter airline with a very loyal customer base that chooses us because of the overall experience. We offer a high level of in-cabin and ground service to our passengers, and while we have competitors, of course, we don’t have a competitor that has our exact same offerings. Sun Country Airlines is still small enough to experiment with routes, destinations, and offerings, but the reality is that when the heavy-hitters in our industry (American, United, Southwest, and Delta) sneeze, we catch cold just like every other airline in the world. So, when the heavy-hitters first starting offering in-flight WiFi a few years ago, we knew that Sun Country would eventually have to offer it as well at some point.
Sun Country has in many ways benefitted from not entering the inflight WiFi connectivity arena too early. While there are clearly advantages to being the first one to the market with an innovative offering, these advantages can be short-lived and sometimes turn into disadvantages. For example, several of the large airlines that invested early are now facing the unpleasant and expensive prospect of re-equipping their large fleets with newer inflight WiFi components because the advances in satellite bandwidth and speeds have rapidly outpaced the capacity of the oldemer service problems, many of which have been luridly covered by the media. Additionally, the initial r on board physical devices, which are not backwards-compatible. Meanwhile, the data demands of the passenger are exponentially increasing, and saturated aircraft bandwidths are causing some unfortunate custoinvestment costs for an airline to “get into the connectivity game” have dropped dramatically (almost fifty percent just over the past three years) as more suppliers have entered the market to grab share with better products and services.
Sun Country has also been able to learn from the trailblazers and the ever-evolving consumer behavior with this technology and offering. The assertion for some at Sun Country has traditionally been: “We don’t need inflight WiFi because we are a leisure airline.” I probably would have agreed with that statement five years ago. Today, however, we know that most employees are expected to be connected to work most – if not all – of the time, regardless of whether or not they are in the office, at home, or thousands of miles away enjoying a really nice Caribbean vacation. This means that leisure travelers, just like business travelers, are increasingly bringing not only their work but also their entertainment with them everywhere they go on their PEDs, and they are insisting on more connectivity with higher bandwidths and speeds. The hypothetical line that separated the needs of the leisure and business traveler is becoming more and more blurred.
Sun Country will complete this interesting journey called inflight WiFi very soon. However, before we arrive at that destination there are some for mid able obstacles that have to be over come, as I have indicated here. But I think the main question for Sun Country, as it relates to inflight WiFi, is no longer “why?” but is instead “how?”