Tablet Wars: Airline Edition

The fight for technological dominance in the air is heating up.

Mar 10, 2014 at 7:31PM

Tablet computers are front and center in the market for mobile devices. Now, airlines are adding tablets as part of a broader push for the increased use of technology and providing marketable extras for passengers. But, even in the airline industry, not all tablets are created equal.

Tablets at Delta
Delta Air Lines (NYSE:DAL) has made the Apple (NASDAQ:AAPL) iPad into a way to link technology to the customer experience. At New York LaGuardia Airport, iPads take orders for food in the Delta terminal and are on nearly every table for customer use.

But Apple's relationship with Delta is far from a monopoly. Last year, the Department of Transportation fined Delta $750,000 for violating rules regarding the bumping of passengers. But the fine came with an interesting condition: Delta was allowed to use up to $425,000 of the fine to buy electronic tablets "to record consumers' decisions on whether they agreed to leave a flight and accept compensation offered by the airline, as well to train Delta personnel on using the tablets."

Showing it does not have an allegiance to one particular tablet, Delta has opted to use the Microsoft (NASDAQ:MSFT) Surface 2 tablet instead of Apple's iPad in much of its operations. Additionally, Computing reports that the airline is phasing out the use of iPads and other unnamed devices in the cockpit, eventually replacing them with the Surface 2. From Delta's perspective, the move appears to be mainly operational. Delta's IT director, Darrell Haskin, attributes the move to the abilities of the Surface 2 including a split screen feature allowing pilots to view maps and weather simultaneously.

Tablets at American Airlines
Delta's not the only U.S.-based airline to use tablets to improve the customer experience; American Airlines Group (NASDAQ:AAL) is using tablets as yet another way to encourage flyers to buy more expensive tickets.

American Airlines Group will now be offering passengers in its premium class cabins Samsung Galaxy 10.1 tablets on certain transcontinental and international flights. The move comes as airlines continue to wage a battle for passengers and use amenities to generate ancillary revenues or market higher-priced tickets.

Tablets at Air Canada rouge
As part of Air Canada's (TSX:AC.B) expansion strategy, the Canadian flag carrier has launched a discount subsidiary called Air Canada rouge. To differentiate Air Canada rouge from mainline Air Canada, the airline has done everything from rebranding aircraft to having Disney train the flight attendants.

Personal entertainment has become another way to make rouge a more attractive offering for flyers. Customers can connect to the aircraft's entertainment network through their own iPads, iPhones, iPods, or laptops. But for customers without one of these devices, the airline will rent you one for $10 serving as another way for Air Canada rouge to generate ancillary revenue.

Mainline Air Canada has also sought the benefits of tablet computers. The airline has given the nod to Apple and its iPad to replace the current paper manuals that each weigh around 16 kilograms (35 pounds). The airline claims this move will save around $3 million per year from increased operational efficiency and reduced fuel costs.

Tablet wars
Airlines fall into the category of large corporate customers and their purchasing decisions are still very much up for grabs in the tablet arena. Across Delta Air Lines, American Airlines Group, and Air Canada, there are tablets from Apple, Microsoft, and Samsung.

As tech companies do with many corporate customers, these tablet makers still have a lot to fight for in the airline space. And with airlines trying to keep the latest in technology to boost ticket sales, more tablet orders could be on the way.

Will this technology be even bigger than tablet computers?
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

Alexander MacLennan owns shares of Air Canada, American Airlines Group, Inc., and Delta Air Lines and has the following options: long January 2015 $22 calls on Delta Air Lines, long January 2015 $25 calls on Delta Air Lines, long January 2015 $30 calls on Delta Air Lines, long January 2015 $17 calls on American Airlines Group, Inc., long January 2015 $32 calls on American Airlines Group, Inc., long May 2014 $31 calls on American Airlines Group, Inc., and long May 2014 $40 calls on American Airlines Group, Inc.. This article is not an endorsement to buy or sell any security and does not constitute professional investment advice. Always do your own due diligence before buying or selling any security. The Motley Fool recommends and owns shares of Apple. It also owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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