During United’s second quarter earnings call airline President Scott Kirby reported that recent investments in new hardware and software for the airlines inflight internet has improved customer satisfaction with the service by 20%, and they’re processing fewer refund requests.
I’ve found United’s inflight internet to be so unreliable that I actively avoid flying the airline, preferring Delta or American whose internet is both faster and works more consistently.
Kirby reports that improvements to their internet product are intended “to get the system to a high enough level of reliability and bandwidth that we can make WiFi free for our customers.”
Already JetBlue offers free internet, others have added it on a more limited basis too, and Southwest, Delta, and Alaska have introduced free inflight messaging. Delta has been trialing free inflight internet.
There’s a rumor that American is considering offering free internet which matches what I wrote about their internal model which is that they prefer to charge customers for internet but if other airlines offer it free they might be forced to do so as well.
In 2012 I wrote that once bandwidth increases substantially for inflight internet, it would eventually become free (included in ticket price). I predicted that would happen within 10 years. People thought I was nuts, but it makes perfect economic sense so seemed inevitable once bandwidth limitations were overcome.
Free internet underscores that the economics of bundling are when a the marginal cost of providing a product to an additional customer is near-zero, it makes more sense to charge for it as a package rather than separately. That’s how cable companies maximize revenue. The mantra of ‘unbundling’ which has been accepted as gospel in the airline industry for the past decade doesn’t always make sense.