Will You Unplug?

Forget about rest for the travel-weary. A group of unnamed investors last week committed $176 million in new funding to Aircell, a privately-held company whose Gogo network delivers Wi-Fi in-flight.

Airlines like the service, which is available on nearly 700 commercial aircraft. AMR's (NYSE: AMR  ) American, Delta (NYSE: DAL  ) , and UAL's (Nasdaq: UAUA  ) United offer it today, and Continental Airlines (NYSE: CAL  ) has moved off the sidelines and will begin offering Gogo in the second quarter of this year.

Customers like it, too. Or at least that's how it appears from the company's Twitter feed. "[J]ust love this [G]ogo Wi-Fi. Yes, it's perfectly OK [to] use, the plane does not fall out of the sky," wrote radio and TV personality Dr. Drew Pinsky on Jan. 5, from a United flight cruising at 37,000 feet.

Good publicity for Aircell is good publicity for carriers. They could use the boost. United's still reeling from a YouTube video about how its baggage handlers broke a guitar in transit, and Southwest's mockery of its competitors' nickel-and-diming of customers with fees makes them look like Mr. Potter from It's A Wonderful Life.

But good PR only goes so far. Aircell's biggest benefit is revenue. At as much as $12.95 per flight, the Gogo service could become a difference-maker for carriers that tend to operate on dangerously thin margins.

What Aircell won't provide is a competitive advantage; too many airlines offer it. Aircell already has deals with eight carriers, and Southwest (NYSE: LUV  ) is working with Aircell competitor Row44 for both broadband and in-flight TV. JetBlue (Nasdaq: JBLU  ) has partnerships with Yahoo! (Nasdaq: YHOO  ) , Research In Motion, and Amazon.com for its wireless-equipped BetaBlue A320 aircraft.

They're all betting you'd rather have coffee and connectivity than pillows and blankets, and that you'll pay for the privilege. Are they right? Please vote in the poll below. You can also make your voice heard by leaving a comment.

Amazon is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is so slim and powerful that it's been called back for a second try at becoming the new Jenny Craig spokesmodel.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 25, 2010, at 4:55 PM, thedisk wrote:

    why pay 12.95 for inflight entertainment when they can pick up a copy of The Disk for free?

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1092682, ~/Articles/ArticleHandler.aspx, 11/28/2014 4:56:15 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement