Gogo CEO Michael Small believes the future of in-flight Wi-Fi will be a “smart platform” that connects passengers to “everything,” and from a business standpoint Gogo doesn’t care whether airlines offer free or fee-based Wi-Fi to their passengers.
“Bags fly free or they don’t,” said Small, seemingly comparing Southwest Airlines’ policy of two free checked bags per passenger with airlines that use a sponsorship model and provide their customers with free, in-flight Wi-Fi. Small addressed the future of Wi-Fi October 15 at the Skift Global Forum in Brooklyn during interviews as part of the program and right after at the conference venue with CNBC [see video below].
In commercial aviation, Gogo offers airlines two business models. In the most common one, Gogo provides its Wi-Fi and entertainment services directly to passengers, who pay a fee established by Gogo, which shares revenue with the airline. In a second model established in August 2014, the airline can pay Gogo directly for its services and establish pricing — free or for a fee — for passengers.
In both interviews at the Skift Global Forum, Small pointed to the future of in-flight Wi-Fi, and Gogo’s upcoming 2KU satellite-based Wi-Fi, as changing both the passenger experience and airline operations. Small says 2KU, which Gogo plans to install on 500 aircraft and seven airlines beginning this Winter, will make in-flight Wi-Fi 20 times faster.
“We are going to be busy for a really, really long time so you can get a smart platform and connect to everything and have universal ability of our service,” Small told CNBC at the Skift Forum.
In the Skift interview, which was carried out by Henry Harteveldt of Atmosphere Research Group as part of the Skift forum program, Small said in-flight browsing and video streaming will become much faster, and passengers will be able to rebook flights and make restaurant reservations on board.
On the airline operations front, Small said Gogo’s 2KU service will enable airlines to interface with avionics in the cockpit and use sensors to monitor the aircrafts’ engines.
Gogo, which is the largest U.S. in-flight Wi-Fi provider, competing with the likes of Airbus, Boeing and Panasonic, among others, won’t get into the business of creating apps for the expected bevy of new in-flight services, but will do its best to provide an accommodating platform to support them, Small said.
Phone Calls on Planes?
Small said smartphone use on planes is accelerating faster than desktops and tablets and he surmised that part of the reason may be airlines cramming in tighter seats. The increased size of phones is stealing tablets’ thunder, as well.
Despite this proliferation of in-flight smartphone use, Small said the question of whether U.S. airlines will permit voice calls on planes is becoming less of an issue as people increase their emailing and texting.
Even in business aviation, where voice calling is fairly common, the frequency of voice calling is declining as business travelers pick up the slack with texting and emailing, Small said.
Small essentially argued that in-flght Wi-Fi is still in the beginning of the beginning in terms of its development and capabilities.
Said Small: “I still think we are in that shallow part of the S curve.”