Canadian potential eyed as Delta’s WiFi in the sky program takes flight

Remember how you eventually learned to grin and bear it as the bus passenger next to you went on a talkathon on their cell phone for the duration of the trip?

Fasten your seatbelt, because you’re likely to enjoy the same experience on your next plane ride.

Delta Air Lines Inc. is set to roll out this fall an in-flight connectivity project in the U.S. that will enable airline passengers to use their cell phones and connect to the Internet with their laptops.

Dubbed the “Gogo” system, the project will essentially turn Delta’s fleet of 330 aircraft into flying WiFi zones where passengers can conduct phone conversations, send and receive e-mail, text message and chat on instant messaging services.

How the Gogo system works

Although Transport Canada currently prohibits the use of any portable electronic device on board an aircraft, a new round of consultations with local airlines on the matter is slated this fall. Commercial airlines and technology vendors, according to industry analysts, are keenly eyeing the situation here and south of the border because in-flight WiFi is a potential revenue generator.

“The U.S. market for in-flight WiFi is estimated at around $1 billion. In Canada, the technology can ring in about $100 million,” according to Nizar Assanie, vice-president of research for Vancouver-based IE Market Research Corp.

Studies conducted by IE Market Research indicates that a substantial number of airline passengers would in fact be willing to pay for on-board online and cellular service if the price were right and justified by good quality connection, Assanie said.

The research executive did not release any numbers but said potential customers came from a “highly sought after” demographic made up of tech-literate business travelers with high disposable incomes. “For this group, shelling out $10 for in-flight connectivity on a short haul flight is very reasonable.”

The service that will be offered by Delta starts at US$9.995 for flights lasting three hours or less and costs $12.95 for trips taking more than three hours.

Such a service will be popular with business travelers who would like to use in-flight downtime to do some work, according to Mark Tauschek, senior research analyst at Info-Tech Research Group of London, Ont.

“I can see quite a number of travelers using the service to catch-up on e-mails or access the head office VPN (virtual private network) to do some work while they have some quiet time on the plane,” said Tauschek.

The number of potential airborne WiFi users is very encouraging, according to a survey commissioned by Aircell LLC, the Broomfield, Colorado-based business aviation telecom company that is installing the mobile network on Delta’s fleet.

“Roughly 10 per cent of passengers on a 100-passenger plane have expressed desire to use on-board Internet and cellular access. That number is expected to increase to 20 per cent in the next two years,” said John Happ, executive vice-president for airline services at Aircell.

The survey also indicated that US$10 would be the most attractive price point for the service.

“A lot of U.S. and Canadian airlines are interested in the technology because of its potential revenue advantage,” Happ said.

There are basically two technologies currently in use for in-flight connectivity and communications, according to Happ.

One method is for the plane to connect to satellites which in turn bounce the transmission to cellular towers on the ground. This type of connection is ideal for intercontinental flights because of its extensive reach. However, it is expensive and transmission is said to suffer from latency issues.

The system used on Delta’s fleet employs onboard cellular antennas that communicate with antennas in the ground. This cellular system is cheaper but is suited for shorter flights since it cannot function over the ocean.

On the ground, a lot of other transport services such as municipal bus lines and trains already offer onboard WiFi access for such commuters, according to Tauschek.

However, a reliable connection is a must or else travelers will most likely ignore the service, the analyst explained. “VIA Rail offers a $10/day WiFi service but the connection was horrible I decided not to use it after one try.”

In-flight connectivity is already in use in Asia, Europe and Alaska but stricter regulations have slowed adoption in Canada and the U.S.

“Current government regulations do not permit the use of transmitting devices aboard moving aircraft,” said Peter Fitzpatrick, a spokesperson for Air Canada.

He said the airlines is monitoring industry developments and is offering WiFi connections on it Maple Leafs Lounges in airports but there are no immediate plans to offer the service aboard its planes.

The ban on in-flight use of electronic gadgets is meant to prevent any potential interference to aircraft communications and operations, according to Maryse Durette, spokesperson for Transport Canada.

After a risk assessment requested by the aviation industry in 2005, these restrictions were relaxed to allow the use of such devices after the plane has landed of when it is taxiing on the tarmac, she said.

“A notice of proposed amendment to the Canadian Aviation Regulation is currently being drafted with a plant to consult with the industry anew this fall,” Durette said.

Some newer planes offer the use of wireless devices during flight. “However, these devices are installed in the aircraft and the services do not extend to a passenger’s use of a portable electronic device such as a personal cell phone,” she said.

Industry analysts think barriers to in-flight WiFi are set to come down soon.

Assanie of IE Market Research believes the resistance is “not so much a technical issue as it is an annoyance issue.”

“I think there’s more of a worry of how someone talking on the cell phone might irritate his or her fellow passenger.”

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Jim Love, Chief Content Officer, IT World Canada

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