Delta Sets ETA for Internet Service - TheStreet

Delta Sets ETA for Internet Service

The airline's plans to roll out on-board Wi-Fi access moves it to the head of the class among its rivals.
Author:
Publish date:

Delta

(DAL) - Get Report

says it will provide wireless connectivity on all domestic flights by next summer, the latest sign that it will not be long before all U.S. airline passengers have wireless access.

With its announcement, Delta -- which is poised to become the biggest carrier in the world after completing a merger with

Northwest

(NWA)

-- moves to the head of the line in the race to provide Internet. Every carrier is evaluating the technology and several others, including

American

(AMR)

and Virgin America, are also pushing ahead quickly.

The ability to provide Internet access has taken on a new urgency as airlines hunt out every available revenue source. "This is a low capital investment and high revenue opportunity for Delta," says spokeswoman Betsy Talton. She declined to specify potential revenue.

Talton noted that Delta intends to expand the service to Northwest's mainline domestic fleet, assuming the Justice Department approves the planned merger. The service will cost $9.95 on flights of three hours or less, and $12.95 on longer flights.

Chicago-based, privately held Aircell is partnering with Delta to install a broadband system enabling passengers with Wi-Fi enabled devices such as laptops, smart phones and PDAs to access the Internet, e-mail accounts and instant messaging. The system is lightweight and requires minimal space, Delta said.

"The advent of Air-To-Ground (ATG) technology has made broadband connectivity in the cabin economically viable for the first time for commercial airlines,'' said Aircell CEO Jack Blumenstein, in a prepared statement.

Starting this fall, Delta will install the wireless system, with a goal of completing work on the approximately 330 aircraft in its domestic fleet, by next summer. The work can be completed during overnight maintenance, enabling a rapid installation process. The carrier has not yet developed plans for Internet access on international flights.

Among other carriers, American is

also working with Aircell

to provide wireless service. Last month, American took the system live for a day, testing it on a round trip between New York's Kennedy Airport and Los Angeles. Later this year, American is expected to roll it out on 15 of its 767-200s, which fly from Kennedy to Los Angeles, San Francisco and Miami. Aircell's third airline customer is Virgin America.

Aircell does not release financial results. Last month, the company completed the third tranche of a package of equity and debt financing now totaling $265 million, a spokesman said. To date, Aircell has not spoken publicly about a public offering.

Among low-fare carriers,

JetBlue

(JBLU) - Get Report

in December became the first U.S. carrier to offer onboard email access to passengers with Wi-Fi enabled laptops and smart phones. So far, the service is confined to a single aircraft, an A320 named BetaBlue.

Meanwhile,

Southwest

(LUV) - Get Report

says it will install wireless equipment on four aircraft this fall. Southwest is working with Los Angeles-based Row 44 on a system that uses satellite-based Internet service, rather than land-based.

Aviation consultant Robert Mann says Delta is the most aggressive carrier in moving to offer Internet connectivity, but key barriers remain. They include ramping up the technology, which "will have the usual teething problems," and developing a method to offer Internet access during long international flights.

Longterm, he says, Delta's move potentially foreshadows a change in passenger behavior, "either making the time on an airplane more productive or removing the last barrier to peace and privacy."