Airlines racing to provide Wi-Fi in the sky

Coming soon to an airplane near you: Broadband.

Wireless Internet service soon will allow passengers to send messages, surf the Web, and, yes, check in with the boss at 30,000 feet.

American Airlines is first out of the starting gate domestically. It expects to have a test plane operating by December, and its whole transcontinental fleet of 767s ready in 2008. Virgin America is close on its heels with plans to equip every seat back with high-speed capability by mid-2008. And Seattle-based Alaska Airlines will run a test next spring and, based on its outcome, the company hopes to outfit its whole fleet.

Surveys show that as many as 70 percent of passengers want wireless Internet, also known as Wi-Fi. Many of them would be willing to change airline loyalty for the service. And so every other major U.S. carrier is watching these experiments closely. They're also engaged in serious discussions about if and when to wire their fleets, according to broadband innovators AirCell and Row 44, the two major companies providing the technology for planes.

Aviation experts say the advent of Wi-Fi skies is all but inevitable, offering one of the few bright spots on the horizon in these not-so-friendly times when a third of all U.S. flights are now delayed.

"Could you imagine a world five years from now where it wasn't the case that you had access to broadband virtually everywhere, including in the air?" says Kevin Mitchell, chairman of the Business Travel Coalition in Radnor, Pa.

This isn't the first time airlines have experimented with airborne broadband. Boeing offered a service called Connexion, which Lufthansa and several Asian airlines used in 2004. But in August 2006, Boeing discontinued the service, saying the market they'd hoped for hadn't materialized. Part of the problem was that the antennas used to pick up the satellite signal were heavy and only appropriate for wide-body planes like a 747. The antennas created drag and increased a plane's fuel burn. Also, because so few planes were equipped with it, passengers sometimes were unaware Wi-Fi was available.

"Anybody that used it, loved it. For $30, you got eight hours of productivity on a transatlantic flight," says Robert Mann, president of R.W. Mann & Co., an aviation consulting business in Port Washington, N.Y. "Unfortunately, it never broke out of an introductory, beta-test pricing model."

In the five years since Boeing started its Connexion experiment, technology has changed. Antennas are now lighter and less expensive and can be installed on everything from a Jumbo 747 to a regional jet. Even the type of broadband offered has expanded.

AirCell, which is servicing American and Virgin America, is using a ground-based technology that accesses existing cell towers. Row 44, which will provide broadband access to Alaska Airlines, is using a satellite-based system like that in Boeing's Connexion. Row 44 executives tout their system as better because it will work over water.

"We can go where land is not, so we can provide service over the oceans for example," says Wendy Campanella, director of business development at Row 44, which is based in Westlake Village, Calif. "We don't have to build any ground infrastructure."

But AirCell's executives are just as adamant that their system is superior because it uses the vast network of cell towers already in existence.

"There's absolutely no way you can provide as robust, cost-effective, or as good broadband service using any other technology," says Jack Blumenstein, president and CEO of AirCell, which is based in Colorado and Illinois. "It's simple: If you can communicate with a cell tower that's five miles away versus a satellite that's 38,000 miles away, there's absolutely no choice about which is going to be the lowest-cost, most effective, technology."

That said, AirCell plans to eventually provide satellite service for overseas flights.

Such fierce competition is also evident in airline industry itself. That's in part because the carriers operate on very thin margins. The profitability of a flight can be determined by just a few passengers per plane. And so airlines work very hard to engender loyalty in their customers. And since many passengers want Wi-Fi, and would be willing to switch airlines for it, the race is on to be wireless in the sky.

"If less than a single percentage of passengers changed from one airline to another, it would have an enormous impact on profitability, particularly if they're a high-value business traveler," says Mr. Blumenstein.

Executives at American say they're "excited" about the opportunity to test the system, which will allow customers to use their laptops and personal digital assistants.

"We'll be testing this on 15 planes when fully implemented: They are the 767-200 class fleet that is chiefly used for transcontinental flights," says Charles Wilson, managing director for external communications at American Airlines.

Virgin America plans to integrate broadband into its existing seat-back entertainment system on all its Airbus A320s. That way passengers wouldn't even need to bring a computer.

"You could access your e-mail from a seat back: Every one of our handsets already has a 'www.' button," says Charles Ogilvie, Virgin America's director of in-flight entertainment.

Eventually Virgin America passengers will be able to log in with their frequent-flier number, and things will pop up like their playlists and chat names.

Both companies say there will probably be a charge for the service, except for first-class passengers. The amount hasn't been settled upon, but it's expected to be about $10.

As for passengers concerned about cellphones in the sky, there's no reason to panic, at least not yet. For now, sky-high cellphones are still banned by the Federal Communications Commission. And American Airlines plans to disable voice-over-Internet options, such as Skype, so passengers don't have to worry about being an unwilling captive audience to conversations.