(Originally posted on November 5, 2014, updated on December 15, 2014 and March 27, 2015) Emirates Airlines (IATA Airline Code – EK) announced today that it will off free internet for passengers on board its Airbus A380 and Boeing 777 aircrafts. More details within.
After some systems retooling, the Dubai International Airport (IATA Airport Code – DXB) based airline will subsidize the cost of on board internet and offer 10mb of free wifi to each passenger. It will charge an additional $1 for another 600mb of data.
While many international airlines have provided free internet for all passengers on a trial basis, it usually costs anywhere $5 onwards to use internet (depending on whether the airline is charging per flight, day or amount of data used). EK’s announcement is an industry FIRST. As a reference, we are including an updated list of airlines and the costs of onboard internet for its passengers from edreams.
Given that EK wants passengers to travel long distance to connect at its hub in DXB, the move to include free on board internet is not surprising. It will provide the airline with the following competitive advantages in the near term:
- Market as one of the first airlines to include free wifi on board for its passengers so that they can stay connected with family, friends and business associates.
- Create a barrier of entry as cost of internet is still relatively expensive. It may not be easy for big international airlines to match this offer without having to re-negotiate contracts with internet suppliers like Gogo.
- Provide a better flying experience for its passengers without asking them to spend more money
There are some pitfalls with free wifi:
- Since all passengers have access to the bandwidth, they might experience delays or slowness to the speed. High data usage applications or streamlining may not work consistently.
- Emirates will incur higher operating costs based on the bandwidth used. This will increase as more aircrafts are operational.
International airlines with direct route competition with EK would have to examine whether they should or can match this offer without increasing costs. I expect other Gulf based airlines to follow suit quickly. Other airlines would not react until more analysis has been performed and would not follow if there is no immediate threat from EK.
As internet costs are driven down based on economy of scale, we should see many airlines move to provide free internet and streaming services over installing heavier entertainment equipments on board.
Update – December 15, 2014
Since the November implementation, Emirates announced that over 600,000 people have used free wifi on 56 Airbus A380s and 30 Boeing 777s. Roughly 5 weeks and 1,500 flights/week (not all in A380s or 777s), that means more than 80 passengers per flight took advantage of this new feature to communicate with family and friends.
Emirates uses mobile specialists OnAir and AeroMobile for its internet connectivity with maximum upload and download speeds of 20Mbps and 100Mbps for the aircraft under ideal conditions (actual speed for passengers depends on how signal strength, passenger load, bandwidth usage) . Under the agreement, telephony functions are also enabled for cell phone calls and SMS.
Update – March 26, 2015
As of the end of February 2015, here is the number of aircrafts updated with the latest Wi-fi and Aerocell technology. As noted from the chart below, Emirates is progressing on enabling the technology on board. At a rate of 2-3 aircrafts per month, it should complete installation in 2016.