WiFi When You Fly: A Battle of the Business Models

(MoneyWatch)  When Southwest opted to use satellite-internet provider Row 44 for its onboard WiFi offerings, one of the main reasons it cited was the ability to own and control the look and feel along with pricing. This is different than the model Aircell has used with its GoGo product, but a recent announcement by that company shows why the models can make a difference. Aircell recently announced a monthly subscription for GoGo, and believe it or not, this is significant.

This new subscription will be an automatically-renewing $34.95 monthly deal. It can be used on absolutely any airline that has GoGo onboard. This is good for GoGo, but the airlines that worked so hard to create a differentiator with onboard WiFi can't be happy about the fact that this weakens that differentiation.

Put another way, since GoGo is branding this as their own, the airlines don't have control over the experience. So a customer on any airline with GoGo will see the same basic thing. Customers like that, but it doesn't help airlines to build loyalty.

Southwest, meanwhile, will be able to control what it offers, and that means offering packages that are specific to Southwest customers. That enables them to try to build loyalty, and that's a big advantage for them.

That doesn't mean that Row 44 is always the right choice for an airline looking to build loyalty. It's going to be more expensive for the airline, and that means it's higher risk for them. But it's certainly an important consideration.

[Image via gogoinflight.com]