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During a Tuesday-morning flight in April from Los Angeles to New York, Christine Lu’s smartphone web browser loaded an unpleasant surprise: Gogo, the in-flight Wi-Fi provider, wanted to charge her $27 to use its service during the five-and-a-half-hour trip.

The price was more than double the $13 that she had paid for Gogo’s Wi-Fi four years earlier, said Ms. Lu, a start-up entrepreneur.

“It’s like a hotel charging obscene rates for Wi-Fi in the room,” said Ms. Lu, who swallowed the cost to do some work. “You get this bad feeling.”

In the inaugural installment of this new consumer technology feature, we examine the price increases for Wi-Fi on flights from the largest provider of the service, Gogo, and explain why some costs have escalated and some have not, and how travelers can sidestep the worst of the charges. The idea of this feature, called Tech Fix, is to make personal technology less frustrating by dissecting the cause of problems, using data, reporting and analysis to come up with the best solutions.

Many travelers are experiencing sticker shock from in-flight Wi-Fi these days. While there are several in-flight Wi-Fi providers, including ViaSat and Global Eagle Entertainment, Gogo is the top provider, equipping more than 2,000 planes from airlines like American Airlines, Delta Air Lines and Virgin America with its service, up from 1,300 in 2011. Gogo’s prices often change depending on when and where you are flying. But on some flights — especially transcontinental routes crammed with business travelers who may have cushy expense accounts — prices have doubled from three years ago.

Consider the following increases: Wi-Fi service on transcontinental flights — such as from San Francisco to New York, from Boston to Seattle or from Los Angeles to New York — now cost $28 to $40, up from roughly $18 in 2012, according to Gogo.

Yet those numbers rarely show up in the average price quote for an in-flight Gogo Wi-Fi session, which now amounts to about $12, up just slightly from $10 in 2012. That’s partly because on flights where fewer people are likely to use Wi-Fi, pricing has remained unchanged, which brings down the average cost per session. For example, Gogo’s Wi-Fi service on flights between New York and Fort Lauderdale, Fla., has cost $10 since 2012. In addition, passengers can choose to pay smaller amounts to use Wi-Fi for a portion of a flight instead of the entire trip.

Gogo’s prices are not just higher now; they are also more unpredictable. The company uses a method called dynamic pricing, in which it tries to forecast the demand for Wi-Fi on each flight and scale pricing accordingly. So the prices for the full durations of transcontinental flights also change each day: Gogo charges the most, $40, on Mondays and Thursdays; Tuesdays, Wednesdays, Fridays and Sundays cost $34; and Saturdays are the cheapest, at $28.

Driving the uneven prices on certain routes is Gogo’s reliance on higher fees to ease overcrowding of its network. With passengers packing a growing number of Internet-connected electronics like smartphones, gaming devices and tablets in their carry-on luggage, the amount of bandwidth they consume on popular flights keeps expanding.

Photo
Tech Fix: In-Flight Wi-Fi Prices Jump as Demand Surges
Michael Small, the chief executive of Gogo, said new satellite technology should add capacity and eventually let the company lower prices for in-flight Wi-Fi.Credit David Kasnic for The New York Times

Michael Small, the chief executive of Gogo, said in an interview that the company had raised prices because demand for Internet service in the sky had exceeded capacity.

“We’re starting to have millions of users, so it’s getting more and more congested, and we have raised prices, which you typically do when you have more demand than you have supply,” he said. “There’s nothing to apologize for. We have trouble finding a business in America that does anything differently.”

Part of the reason Gogo’s costs can be so high is that the prevailing technology it uses has hit some limits. Its in-flight Wi-Fi works like the cellular network that provides service for cellphones, in which antennas are used to transmit signals to and from towers on the ground. Adding capacity is difficult because there is a limited amount of radio spectrum available for the towers.

To improve the situation, Gogo uses satellite technology for over-water flights, and the company is upgrading to a faster satellite technology called 2Ku. The new satellite technology, which received regulatory approval on Monday and will be widely released next year, should add capacity and eventually let the company lower prices, Mr. Small said.

“When we start rolling out the satellite technology and bring out more capacity, we’ll be back in the business of trying to bring on new customers and grow the business and introduce exciting new price plans,” Mr. Small said.

Continue reading the main story

How Much Gogo Charges for Its In-Flight Wi-Fi Service

The company’s prices often change depending on when and where you are flying. On some transcontinental flights, peak prices have doubled in the last three years.

Los Angeles ➞ New York
San Francisco ➞ New York
Boston ➞ Seattle

The minimum price for Wi-Fi service for the duration of the flight.

Gogo calculates the cost of its in-flight Wi-Fi service based on perceived demand. The higher rates correspond to peak travel times, especially for business travelers.

Some competitors that already offer satellite-based in-flight Wi-Fi technology have found opportunities to undercut Gogo’s prices. JetBlue, which uses satellite technology provided by ViaSat, provides free Wi-Fi service on the majority of its routes, though passengers can pay $9 an hour for faster Internet speeds. Southwest Airlines, which has teamed up with Global Eagle Entertainment on satellite service, charges a flat rate of $8 per Wi-Fi session.

Walé Adepoju, the chief commercial officer for Global Eagle Entertainment, said Wi-Fi was one component of the broad package of media services his company provided, including movies, music and television content. The company allows airlines to set the Wi-Fi prices; they can decide to cover the cost of Internet service by including it in ticket prices or to make money through other means, like advertising, he said.

Southwest has about 550 aircraft equipped with Global Eagle Entertainment’s Wi-Fi services, said Kevin Kleist, Southwest’s manager of Wi-Fi and in-flight entertainment. He said the company had experimented with different prices before concluding that $8 was the sweet spot.

“You don’t want to overprice and not get enough customers. And you don’t want to underprice it and get too many and too much congestion,” Mr. Kleist said.

Consumers can take heart because there are several ways to pay less for in-flight Wi-Fi. If Internet in the sky is that important, you can always pick an airline offering cheaper Wi-Fi, like Southwest or JetBlue. Or if you’re flying on a Gogo-equipped airplane, you can choose a day of the week when Wi-Fi prices are lower.

Another way to get a cheaper rate for Gogo is ordering the service before boarding the plane. People can buy an all-day pass to use Wi-Fi on any Gogo-equipped flight for $16, while frequent travelers can purchase a monthly subscription for $50.

These solutions are a small comfort to Ms. Lu. “How am I going to remember for a 6 a.m. flight, of all the things I have to do, to log on at 4 a.m. and prepay for my Wi-Fi?” she said. “Are you kidding me?”

Read more http://rss.nytimes.com/c/34625/f/640387/s/494f9ff9/sc/28/l/0L0Snytimes0N0C20A150C0A80C270Ctechnology0Cpersonaltech0Cin0Eflight0Ewi0Efi0Eprices0Ejump0Eas0Edemand0Esurges0Bhtml0Dpartner0Frss0Gemc0Frss/story01.htm


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