In-Flight Wifi Safe For Airline Profits

By | January 3, 2012

When they’re not busy spuriously telling you to turn off your electronics during takeoff and landing, airlines are busy trying to get you to turn them back on- and open your wallet- to buy their pricey in-flight wifi.  Apparently, wifi is safe

Wi-Fi Signal logo

Image via Wikipedia

enough in flight if the airlines can profit from it.  Dan Frommer of SplatF read through GoGo Wireless’s recent IPO filing and learned some interesting things.  Gogo accounts for 85% of wifi-equipped planes in the US, but on only 16% of the North American fleet is currently equipped.  GoGo’s revenue per passenger on wifi-enabled flights is $.41, up from $.15 two years ago. Only 4% of eligible passengers currently sign up for the service; as this adoption rate increases and GoGo provides additional  services, revenue per passenger should continue to increase.  Out of this revenue, GoGo plays an undisclosed percentage back to the airline.  If GoGo can successfully improve its monetization, airlines stand to start seeing meaningful revenue from this arrangement, revenue that will be quite profitable for the airlines as GoGo bears all the costs.  Enough to cover the equipment failures that won’t be caused by harmless electronics in-flight.