Surfing in the Friendly Skies

The old standbys of reading, sleeping or watching an in-flight movie to kill time during a lengthy flight won’t be the only options to passengers aboard two airlines this spring. Row 44 invites them instead to sit back, relax and log on to the Internet. Alaska Airlines and Southwest Airlines will install antennas and connection boxes developed by the Westlake Village-based tech company on a select number of their jets this spring as a test to see how well the equipment works and if passengers take to it. If satisfied the service does all that Row 44 claims, a fleet-wide deployment could begin later this year. Alaska Airlines uses more than 100 jets while Southwest, the nation’s largest discount air carrier, has 500-plus aircraft. “They will assess when they are happy with it,” said John Guidon, co-founder and CEO of Row 44. Other companies are ready to launch their own services. Aircell began installing its broadband connection equipment last month on 15 American Airlines 767s; JetBlue is testing a free Wi-Fi service with limited online access; and next year, Continental Airlines will offer passengers e-mail and instant messaging capabilities from LiveTV, a subsidiary of JetBlue. Row 44, however, sees itself as a company apart because its broadband access comes through satellites and not from ground-based towers as used by Aircell. In-flight broadband access has been tried before with the failed Connexion service that had its connection severed in 2006 by operator Boeing. Guidon and Row 44’s President Gregg Fialcowitz say their company has solved Boeing’s Connexion problems. Whereas Boeing used older and limited technology, Row 44’s is state of the art. The Connexion equipment was heavy, costly to install and could not fit on narrow-body planes while the Row 44 system weighs 150 pounds and uses an exterior antenna that can be installed over two nights, meaning no aircraft needs to be pulled from service. Most importantly, where Connexion served foreign markets, Row 44 is targeting U.S. airlines with its rollout. “All in all they didn’t have a chance,” Guidon said about Connexion. In-Flight Survey Market demand is also in Row 44’s corner. Data provided to the company from numerous airlines showed a desire for broadband access from leisure travelers as much as business travelers because the Internet is as much an entertainment medium as a work-related device. A recent study from Forrester Research found that even on short flights of less than an hour, 15 percent of leisure travelers wanted Internet access. The number leaps to 55 percent for transcontinental flights and those leaving major hubs. The study also found the most likely users of in-flight broadband are in their early 40s, affluent and loyal to a brand offering the services they crave. In addition, 33 percent said they are willing to pay more for better service, and 38 percent disagree that having no Internet access allows them to relax during a flight. Just more than 1,000 people responded to questions about in-flight access in the survey, study author Henry Harteveldt said. “People may accept the fact that they can’t smoke on a plane,” Harteveldt wrote in the report, “but the addiction that consumers have with the Internet clearly won’t be left on terra firma any more.” To give passengers their Internet fix, Row 44 invested $3 million for infrastructure located outside Las Vegas. A cost of $150,000 to $225,000 per aircraft is estimated for installation of antennas and connection boxes. A direct sale of access time to a passenger will cost in the range of $5.99 for unlimited PDA access and $7.99 for unlimited laptop access, Fialcowitz said. An Efficient Business Model Headquartered in the Conejo Valley, Row 44 also has research and development facilities in Chicago and Arizona. Hughes Electronics Corp. provides the satellite time while other development partners provide the satellite connections; manufacture the antennas and boxes; manage the implementation; and get authorization from the Federal Aviation Administration to modify aircraft with the equipment Having those partners is an efficient business model for the information age. After all, his company’s expertise is specifying what is needed to get broadband access to airline passengers not creating a large staff, Guidon said. Row 44’s growth strategy is to build a profitable spot market in North America and another in Europe and then linking the two. The company can then model revenue estimates for expansion into Asia and the Middle East. “While we would like to link up all those places, we want to do it in a financially responsible way,” Guidon said. Row 44 is in discussions with Boeing and Airbus to have its equipment installed right on the factory line during the assembly of the plane but Fialcowitz figured that will not happen for at least two years.