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U.S. discount carrier Spirit Airlines will install Wi-Fi fast enough to permit passengers to stream from Amazon, Netflix and other providers by summer 2019, another in a series of changes the airline’s new management has implemented to increase satisfaction scores and broaden its customer base.
“It is something passengers want today,” Spirit President Ted Christie said in an interview. “They just can’t get it.”
Like Ryanair in Europe, which introduced a five-year plan called Always Getting Better four years ago, Spirit, the first U.S. ultra-low-cost-carrier, has discovered an airline must offer more than low fares to compete. Since former Air Tran Airways CEO Robert Fornaro took over in January 2016, Spirit has prioritized customer satisfaction, trained flight attendants in customer service, joined the TSA’s Precheck program, focused on on-time performance, and invested iin digital tools, including its mobile app.
Previous Spirit executives mostly calculated that passengers booked Spirit for its low prices. But with legacy carriers increasingly matching Spirit’s fares with their no-frills basic economy offerings, Spirit is more focused on trying to keep customers happy — or at least content. Customer complaints are way down compared to three years ago, though in February, the most recent month for which data is available, Spirit still received more Department of Transportation complaints per 100,000 passengers than any other U.S. airline.
Wi-Fi could help change that. Spirit is installing Ka-band high-throughput satellite internet from Thales, one of several major connectivity companies, and Christie said he’s confident customers will be able to use it just like at home. First, the service will cover about 97 percent of Spirit’s routes, but by 2021 after a new satellite launches, customers on all flights should have Wi-Fi.
The new system will not, however, include free in-flight entertainment. Some carriers, including United Airlines and Delta Air Lines, let passengers stream content to their own devices from a server on the aircraft. Christie said Spirit could add a similar system some day.
For internet, Spirit will change based on route and demand, but the airline said Friday it expects the average price per flight will be about $6.50, making it potentially cheaper than products offered elsewhere. JetBlue, however, offers free Wi-Fi.
Every plane in Spirit’s fleet — roughly 135 Airbus aircraft — should have connectivity by next summer. The airline said it will be the first discount carrier in the Americas to offer Wi-Fi.
“Wi-Fi has become so ubiquitous that no matter where you go you are looking for the password,” Christie said. “It is becoming more a part of our regular experience.”
A Cost-Neutral Solution
Discount airlines have generally avoided connectivity because they haven’t wanted to pay it. Airlines like Ryanair and Spirit are ruthless about spending, an approach that makes them considerably more nimble than their legacy airline peers. Spirit’s cost-per-available seat mile, a common industry metric measuring costs, was 8.84 cents in the first quarter, almost seven cents less than American Airlines.
But as the Wi-Fi industry has matured, airlines have been able to cut better deals with providers. Christie said the agreement with Thales will not affect the airline’s company’s cost structure, but will come with extra revenue opportunities. In addition to selling WiFi, Spirit could sell advertising or sponsorships, as JetBlue has done with Amazon.
“We think there is a chance for us to drive some real value in ancillary revenues,” said Christie, who will become Spirit’s CEO in January.
WiFi may also help Spirt attract new customers segments. While it remains a leisure-focused airline, Spirit might be able to carry more business travelers, particularly those who want a deal but fear losing their connection to the office on a long, unconnected fight.
When the airline polls travelers — not just Spirit customers — it often learns a significant portion of the public like to have WiFi when traveling. The new internet, Christie said, could “convince people who haven’t flown us to give us a try.”