Spirit Wants to Save You From Cheap Airline Hell
(Bloomberg) -- Step aboard an ultra-low-cost airline such has Ryanair or Frontier and the amenities can be jarringly Spartan. To keep costs low, free snacks don’t exist and in-flight entertainment is the seatback safety card.
How do you distract passengers from this painful minimalism? Well Wi-Fi, of course, a lesson learned by a small but growing group of no-frills carriers. For Spirit Airlines Inc., it’s part of a bigger strategy to fight off big airlines looking to compete with their low-cost brethren.
Spirit is the latest to embrace in-flight Wi-Fi access, for both its revenue-generating and passenger-placating attributes. Starting later this year, the carrier will offer satellite-based broadband internet with Thales Group. The average price per flight is expected to be under $7, and passengers must use their own electronic devices to access the service, which will offer an internet portal but no free streaming entertainment. Get a Netflix or Hulu account if you want to watch something.
Miramar, Florida-based Spirit has spent the past year studying how to “improve the guests’ on-board experience and stay true to our model,” President Ted Christie said in an interview. “And that’s been the riddle to solve.” He called Thales “the most forward thinking” in terms of how to structure the Wi-Fi offering, given the airline’s strict focus on costs.
The changes are part of a broader customer-service revamp at Spirit, which has seen ferocious domestic competition as its Big Three U.S. rivals have begun targeting the lowest-priced ticket buyers. American Airlines Group Inc., Delta Air Lines Inc. and United Continental Holdings Inc. have all introduced “basic economy” fares to match Spirit and Frontier Airlines’ prices on competing nonstop routes. Spirit has worked aggressively to improve its once-dismal on-time performance—it was fourth in the most recent federal rankings of U.S. airlines’ punctuality—and plans additional customer-service training for more than 3,000 airport employees.
While some other discount airlines also offer Wi-Fi, the plans announced Friday would make Spirit the first ultra-low-cost carrier in North America to outfit its planes with the service. Spirit said it will offer speeds comparable to broadband sold for the home.
Spirit will charge an average of $6.50 per flight for Wi-Fi, with prices based on flight distance and bandwidth usage. The first installations will begin this fall, with its full Airbus fleet set to be equipped by mid-2019. Thales, which offers its service with SES satellites, said 97 percent of Spirit’s network will be covered upon the service’s launch.
Offering high-speed internet “doesn’t mean that we have to charge everybody a little bit more in their fare to cover the cost of the Wi-Fi,” said Christie, who will become Spirit’s chief executive on Jan. 1. The airline sees Wi-Fi as a new revenue stream, although it declined to discuss financial estimates.
The aviation world’s low-cost pioneer, Southwest Airlines Co., began testing Wi-Fi service in early 2009, spurred by customer interest and rapid adoption of in-flight internet among its domestic rivals. It charges $8 per day per device.
But in the ultra-low-cost world, Wi-Fi has faced sluggish adoption, due to the costs, with Ryanair Holdings Plc studying options repeatedly before deciding against it. Asian low-cost carriers have dabbled the most with inflight Wi-Fi, as Air Asia, Dragonair, Nok Air and Singapore-based Scoot all offer the service. (Bangkok-based Nok Air touts itself as the first Asian carrier to offer free Wi-Fi.)
Meanwhile, Norwegian Air Shuttle offers complimentary Wi-Fi on its European routes, but none on its long-haul international network. Level, a new long-haul budget brand from U.K.-based IAG, offers Wi-Fi access for 8.99 euros ($10.67) and higher. Eurowings, Deutsche Lufthansa AG’s low-cost unit, offers Wi-Fi on some of its fleet.
Late last year, EasyJet Plc began a modest test with Japanese retailer Rakuten Inc. and Immfly, a Barcelona-based digital media company, to offer passengers wireless in-flight content—books, movies, music and games—to their own devices, for a fee.
©2018 Bloomberg L.P.