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United Airlines is about to give passengers more options for paying for inflight internet.
The Chicago-based carrier revealed last week that it was testing a new payment portal that would allow passengers to use frequent flyer miles to pay for Wi-Fi instead of cash. In an interview with Reuters, Scott Wilson, United’s vice president of ecommerce and merchandising, suggested that the new functionality would be part of the airline’s larger exploration of new ways to improve the passenger experience.
As to the cost of the service, Wilson was not specific, though it would likely be proportional to current Wi-Fi costs for United passengers. The cost of WiFi on United flights varies by the service provider and the length of flight. The airline operates flights with Internet service primarily provided by Panasonic Avionics, though many of its transcontinental flights operate with Wi-Fi powered by Gogo.
Because of the wide variation of service offered by the airline, current costs range from around $2.99 per hour to as much as $19.99 for the duration of the flight. To calculate the cost for the service in miles, United could apply a ratio of cents/mile and produce a cost in miles to present to consumers. It’s currently possible to buy miles through United.com for 2-3 cents/mile. As an extension of that valuation, United might charge 150 miles/hour for Wi-Fi.
A more likely scenario, however, is that United sees the service as a good way to recapture frequent flyer miles at a good value to the airline. Airline-sponsored auctions and shopping portals for gift cards or experiences illustrate this strategy, too By charging consumers hefty prices on third-party purchases, the airline can lower the risk of a passenger booking a high-value airplane ticket with a low volume of miles. That seat can then eventually be sold for cash.
Where United’s new mileage-for-WiFi strategy may find its best traction is among casual travelers either uninterested in accruing a large points’ balance or unaware of each point’s value. And for that demographic, the flexibility in payment will be a welcome change. Everyone else, however, may want to pay cash.