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.
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Would you pay $12.95 for in-flight Wi-Fi?