Recently, American Airlines has added WiFi to many of its flights. According to the New York Times, it costs about $100,000 to ready a plane for wireless internet access. Many of the initial users are satisfied with the actual access but dissatisfied with the usual airline issue--space for the laptop. Additionally, American Airlines suggests using a car lighter power adapter to power the computers because outlets are limited. In-Stat, an Arizona based research firm, reported that fewer than 1 in 50 passengers are paying the average $5 per hour WiFi fees. At that adoption rate In-Stat notes that revenue stream will be about $95 million which is pennies to an industry that made $14 billion last year charging for food, baggage, and seat upgrades. Duffka's students are currently learning about profitability based on market structure. The airlines function in an Oligopoly market structure which is dominated by interdependence and game theory type decision making. If Wi Fi attracts customers, than game theory suggests that the dominant strategy should be to include Wi Fi on all flights within the next five years. Kayak.com has evaluated in flight Wi Fi here.
I think that they should only put it on some planes and then the people who want to have access to wi-fi should just go on those planes. There would probably be enough space for everyone because I dont think that a lot of people will want to pay for it when they can just do whatever they want to do for free 3 hours later. I would do it if it was free probably but I don't want to pay for it because I could do it door free later.
ReplyDeleteI think that wifiis a good idea for long flights, but on shorter flights it wouldn't really be a big deal because you could live without it for 2 hours. On longer flights such as international ones, it would make sense to have Internet so you can do work or be on Facebook while in the air.
ReplyDeleteI think that if the airlines lower it's prices for wifi then there would be mor of a profit for them.
ReplyDeleteI think that few people would be willing to pay the fee per hour to use wifi. Many business travelers would just use their computer without the Internet. Airlines will still probably be able to make a profit off of this and because the airline companies are so interdependent, it will be adopted by all the others.
ReplyDeleteSince not many travelers are using and willing to pay for the wi fi in the airplaines i dont think that the benefit exceeds the cost. I think airlines should change their policies on the laptops(weight and etc.) and also lower their prices for the wifi.
ReplyDeleteWhile installing wifi access into airplanes may not be economically efficient, it is necessary to include the service in order to seem more technologically advanced than competitors. Just like hotels began offering wireless internet several years ago, airlines will likely reduce their prices or even offer it for free. At a price of five dollars, very few people would pay to use wireless Internet on a short flight.
ReplyDeleteI think that the benefit here exceeds the cost. I think it is a very reasonable price for being on an airplane. I have fought a computer on a plane before to watch movies but i know that if it were available i would pay for wifi at that price. Maybe not for the whole flight, but maybe for two hours. Also there are people who travel a lot for business who would find it very helpful to have internet during their travels.
ReplyDeleteI think wifi is a good idea but I don't think people are going to want to pay $5 to use it. The cost does not outweigh the benefit.
ReplyDeleteNot very many will be using the Internet connection, because who wants to do work while they're traveling and if they do, people will automatically be looking over your shoulder while you're working on your laptop. On the other hand, airlines could give free passwords to some passengers for a free usage of the internet in special circumstances or if they're loyal to the airline.
ReplyDeleteSiince they are making a profit, then MB > MC and so is a good idea to include it in the flights.
ReplyDeleteIf it's making a profit for the airline, while providing a demanded service to some passengers, it is well worth keeping.
Also, in the short run, while other airlines haven't included the service on their flights, this simple addition might be the decision point for some customers to fly with AA over other providers.
I think international airlines should spend the money to have wifi, but for short flights to Florida marginal cost exceeds marginal benefits. I think the wifi is a great idea, and I would be willing to spend the money to use it.
ReplyDeleteI think it is a nice thing to have on flights but I would not pay for it. I'm used to not paying for wi fi and I see it as something that should be complimentary. Them saying how they make hardly any money on it also doesn't help. It's proven that not a lot of people buy it so they should just make it free.
ReplyDeleteIn my opinion, although flights don't get a huge amount of wifi users right night, I'm sure with time it will become more widely talked about and used. If flights are willing to spend so much on the wifi they should pay the short run cost of fixing the planes so that laptops are easier to use and be more comforatable using. They would probably get more people using the wifi that way.
ReplyDeleteI would probably not pay for the wifi access because I would rather just watch a movie, especially if it is a short flight. If it is a long flight it would be useful but I would probably only use it for 10 or 15 minutes to check email and facebook.
ReplyDeleteIf some airlines are adopting wifi, then all airlines should adopt it in order to be competitive. However, with the current adoption rate of wifi, it seems like right now having wifi added to flights is not a smart investment.
ReplyDeleteI think that it is a good idea to have because it is profitable for the air lines. But I would not pay for the wifi because I don't need to do my work while I am on the plane. But for business people would pay for this service because they may need to do some work while on their flight
ReplyDeleteWould I personally pay for wifi? no. I flew to Germany without wifi and I survived. It's called a gameboy, and pokemon, and sleep. I do see how it could be beneficial to business people who are flying on a business trip and/or if your employer is paying for the trip. You could get some work done, or prepare for the presentation you're about to give in the place you're flying to.
ReplyDeleteAs long as the Airlines are making a profit, it is in their best interest to make wifi available. But the Airlines should also look at the costs to improve laptop use on airplanes. People are still willing and able to pay $5 per hour for wifi. The revenue is not much compared to the total revenue.
ReplyDeleteI firmly believe that the cost definitely exceeds the benefit. Even if your a business man theres only so much work you can even get done on an airplane and thats assuming they want to use their valuable time to work when thats all they do to begin with. Non-business people certainly wouldn't pay at much money to google things or go on YouTube during a flight.
ReplyDeleteAlthough onboard wi-fi does produce a profit, it's negligible compared to the airline's total revenue. Either the price of the wi-fi per hour should be lowered or the cost of wi-fi service should be integrated into the price of the ticket.
ReplyDeleteI think it is a good idea to have wifi only in select spots, as in first class. When I recently flew to California I saw only businessmen using the wifi on the plane. We were considering getting the wifi until we saw that you had to pay for it. With all the other charges airlines make you pay for, no one wants to pull out their credit card for a 5 dollar charge
ReplyDeleteThis is just another thing that the airline restricts you to use unless you pay ridiculous amounts. The airlines can start using wifi but not many people will use it, becoming a stupid thing to do
ReplyDeleteSeeing as how I personally am used to having access to Wi-Fi for free the majority of the time, I definitely wouldn't be willing to pay roughly $5 an hour to use the Wi-Fi that American Airlines is offering. I'm confident that there are many other people who also have access to Wi-Fi for free most of the time, if not all of the time, who feel the same way as me.
ReplyDeleteI think that this would be good for business people so they can do their work on the plane. I also think this is a good option for long flights but I don't think it is necessary for short flights. I think the money is worth it because it is not really expensive.
ReplyDeleteI don't believe that wifi should be an extra cost. It should be included in the price of the ticket. And as for bringing the car chargers onto a plane, with security being the way it is, people will try to bring crazy stuff onto planes. Besides, you don't need wifi to be entertained. As shocking as it may sound, it's called "talking to other people".
ReplyDeleteI don't that planes should offer wi-fi because people can be without a fast working technology system for an hour or two. The benefit does not exceed this high cost because consumers aren't even getting that much out of wi-fi in the air.
ReplyDeleteAs long as the airline is making a profit they should allow access to wi-fi. Besides it keeps the passengers occupied. However, I would not want to pay to have wi-fi
ReplyDeleteI think this is a good idea and it can benefit many flight passengers. I think a good idea would be to have planes that have it and those that don't. They should keep the planes that dot have it the same price, and make the wone with newly added wifi more expensive. This way, airlines will make more money.
ReplyDeleteI think that the idea of wifi on planes is good, but I don't believe many people will pay for wifi, especially on short flights. If the airlines offered it for free, by raising the ticket price to pay for the wifi, more people will take advantage of it, not realizing they are paying for it. In this scenario, the benefit will exceed the cost.
ReplyDeleteI believe the price of wifi should be included in the ticket price. I believe it's a great idea for international flights but for domestic flights it's not necessary unless you need it for work.
ReplyDeleteI think that as long as the airlines are making an economic profit from the wifi, that they should keep installing it in their planes. Even if they are making a very small profit compared to the billions of dollars they will make in revenue every year, as long as MB exceeds MC, why wouldn't they keep installing the wifi? A small profit is better than no profit
ReplyDeletei do not think that the benefit exceeds the cost. if not a lot of people will pay for wi-fi then itis not a good idea to waste money preparing the plane for it. also, if people have survived not using the internet on planes all of these years, we can still live without it. many airports, like the one in Sydney offer free interent access and computers to use near the gate. this allows travelers to check emails, etc right before their flight. if people are worried about business emails during flight, etc, then the other people need to understand that they are traveling and the business question can be put on hold for a couple hours.
ReplyDeleteI think it should be offered on only international flights because the costs are already really expensive so 5$ wouldn't matter much and woukd be beneficial to the long hours in the air. A 2-3 hour flight wouldn't make much sense to pay for wifi because you have time to get work done isn't that long.
ReplyDeleteI think they should designate planes that only fly to far destinations and install the wifi in only those planes because if it is a shorter flight people will be able to go without wifi more easily and also people on the shorter flights are general more leisurely travelers and not business men who need the wifi
ReplyDeleteI don't think they should include WiFi on planes until they can do it profitably while still charging a low rate or none at all. I think people will start to become more and more dependent on WiFi while the cost of having it will decrease. Until that happens I don't think that it's a good idea for airlines to provide it.
ReplyDeleteI think wifi on an airplane flight is a brilliant idea for long hours. Most people on the airplane during long hours having nothing to do when the movie doesn't appeal to them, and with the broad Internet web people will be able to entertain themselves. I believe this service will have a high demand and will add a positive externality to large families making the benefits exceed the costs.
ReplyDeleteI think that this feature would be useful for international flights because it will give passengers something to do other than watching tv or reading a book. For shorter flights however, I don't think it would be very useful because if you wanted to check your email or your facebook it would cost you five dollars for using the wifi for two minutes.
ReplyDeleteMaybe adopting a more realistic price structure which would let users access the wifi for smaller amounts of time than 1 hour chunks would end up being more profitable for the airlines as the demand for small periods of wifi access may be fairly high. If they continue to sell it in hour long chunks and for $5 I think the profitability for the airlines won't exist.
ReplyDeleteI say maybe some if the planes, about half of them, And then charge more for people to fly iairplanes with wifi, but have it free for when you use it, but charge more to fly in those airplanes
ReplyDelete$100000 is a large variable cost considering how many people are currently using it at $5/hour. Wifi access on a plane is pretty elastic and I know very few people who would pay five dollars an hour just to go online for a few hours. I think it could be useful for people who really need to work but they travel by plane a lot, however they could get a lot more vacationers using it if they reduced the price a little bit.
ReplyDeleteI think that all planes should have wifi on them. I believe that there is a high demand for people who want to be able to use the Internet while flying on plane. Personally I don't think that the $5 an hour for wifi is too much because I am already paying hundreds of dollars for a seat on the plane and the extra few dollars isn't a significant cost to me
ReplyDeleteI believe this move to wifi on planes, though good on paper, will do little to increase airline revenue. Most people that use laptops that would require wifi are businessmen, whose demand for airfare is quite inelastic. I would not be willing to pay $5 just to check my email or update my fantasy football team, and my friends would not pay either. I don't fly that often and the noise level on the plane is quite low, so I'll "suffer" without wifi for a couple hours.
ReplyDeleteI think that for short flights this would be insufficient because you can go a couple of hours without the computer and just watch the movie or rest. But for those who are on longer flights or are traveling for buisness it would come in handy, and be worth the small asking price per hour.
ReplyDeleteFor international flights or flights longer around 2 to 3 hours, I think wifi could be useful but only for a little bit. I would rather just sleep,listen to music, or watch a movie than have to pay to access the Internet. Even though the price isn't bad, I would not want to pay $5 just to go on facebook for 15 minutes or check email for 5 minutes.
ReplyDeleteI don't think that for short domestic flights wifi is necessary nor profitable. People can live without wifi for 2 hours especially when it costs for $5. For longer flights wifi makes sense however, the price is still relatively expensive and a cheaper price would definitely attract more flyers.
ReplyDeleteNot necessary!!!! It should be available for those businessmen who need access to the internet on long flights, however I don't find it necessary. Peopple can live without t he internet for a plane ride
ReplyDeleteI think it's great that they are adding wifi but if it were free or a set amount like $15 for the whole ride or something like that. It would be profitable but I think that it would only be mostly business people using the wifi in which case they probably wouldn't care because their company probably pays for it.
ReplyDeleteI like the idea of having a wi fi on a plane especially if its a long flight. It's great for people who need to work and if you need to communicate with someone. Although 1 in 50 people choose to use it, I would definatley use it if I had $5.
ReplyDeleteI don't really think the wifi is worth it. Most people won't want to pay 5 dollars an hour because most flights are at least 2 or 3 hours. Assuming that the price must be paid for a full hour, it won't be worth it at all because people may only need the Internet for a few minutes. Not many people will need to use the wifi anyway, so the benefit definitely does not outweigh the cost.
ReplyDeleteI think wifi attracts customers and it should be installed in airplanes. The airline that doesn't install this will fall behind. With the vast majority of people have phones that have Internet, so this makes sense.
ReplyDeleteI think that it is good to have wifi on the plane because those rides can get boring and that gives u something to do.
ReplyDeleteI think they should include wifi only on long and expensive flights. If your on a short 2 hour flight, it dose t pay to have wifi. Thay should only prep the large planes such as the 747s because they have more passenger capacity and usually it's a longer flight so consumers would be able to tolerate and enjoy ridiculously long flights.
ReplyDeleteIf it was for free on a flight I would take advantage of it. However, I would not pay more for a plane ticket because it has a wifi connection in the air. It is not necessary to be connected to the internet every second of our lives and I would rather not have that option so I could relax and watch a movie on the plane father than be constantly checking my facebook. I believe for airlines to beat competitors, it is a good idea for those who have long flights or have business to attend to. I don't think if your flying from Chicago to new York it is worth it. You can survive a two hour flight without it
ReplyDeleteI think that wifi should be available only for the economy first or business classes. This would increase demand for the expensive seats that provide other luxuries
ReplyDeleteI think that wifi should be put on all planes within the next year. With new tech advances people would be able to easily carry small computers and other items like the iPad on planes and one of the greatest advantages to those items is the internet. Also some people need to get work done on longer plane flights and require the Internet to do that work
ReplyDeleteI think that wi-fi would be a good idea because A.) it's give people more to do on the airplane. And B.) it'd be a better way for the airplane companies to make more money and stay in business.
ReplyDeleteI believe in the long run wifi will be intergrated into all airplanes except for any airline company thats marketing stratergy is basic cheap flight. Since there are so many flights a day for each plane there are plently of passengers. Eventually the price will be intergrated into the ticket instead of individually based. Its like how almost every hotel now has "free" wifi
ReplyDeleteWi-fi could be very useful to business people, but not really worth $5 an hour for the average person. I usually listen to music, watch a movie, or try to fall asleep on planes so I don't need the wi-fi. I think it's a great feature to have on a plane, but not one i would use.
ReplyDeleteI think that adding wifi to airplanes may be beneficial for some who need to be connected to their job, or if they need it for work-related needs. I also think that in the future this will develop more and the price will drop, which will result in more people using wifi on airplanes.
ReplyDeletePersonally, I would never purchase on flight wifi. At an economic standpoint though, this is a great idea for business class, who will probably purchase this for a lot of money because their companies will pay for it.
ReplyDeleteIt seems ridiculous to pay $5 an hour for wifi on an airplane. I understand that they are making a new product available and the market for it isn't certain yet, but I feel as though the demand will be extremely elastic. At rates on a per hour basis, I don't feel it will actually even be profitable for the companies after you figure in the cost of making the wifi available.
ReplyDeleteBefore an airline decides to adopt to the on-board wi-fi trend, it should carefully consider if it's worth paying the installation price for the wireless system and the power outlets for laptops on each seat. If they calculate that a profit is readily achievable, they should go for it. Then again the cost of these installations is pocket change for airlines and the profit is barely anything compared to what they already make. As long as passengers are willing to pay and some profit is made, on-board wi-fi is a good way to go for commercial airlines.
ReplyDeleteI think Duffka did not ask a question in this section. So, there is no need to answer here. Also, I was absent on this day.
ReplyDelete