The last big U.S. airline holdout to the Wi-Fi revolution, United Continental Holdings Inc., unveiled plans to wire 200 domestic aircraft for satellite-based broadband service starting next year.
United Continental said Tuesday it had signed a letter of intent with LiveTV, a subsidiary of JetBlue Airways, to provide inflight Internet service on more than 200 Continental Boeing 737 and 757 jets already equipped for DirecTV service.
The Chicago-based parent company to United and Continental airlines is also exploring adding international Wi-Fi service and mulling deals with other broadband providers to help wire its fleet of more than 700 jets, United Continental CEO Jeff Smisek told investors and analysts Tuesday.
“We are also working on projects to roll out Wi-Fi across the remainder of our fleet,” Smisek told attendees of J.P. Morgan’s Aviation, Transportation and Defense Conference. “It may well be with a different set of providers than LiveTV. ”
The moves are certain to be welcomed by some longtime business customers of United and Continental airlines, which have been slow to act as rivals like Delta, Southwest and American airlines retrofitted aircraft for wireless connections.
United only offers Aircell’s Gogo Inflight Internet service on 14 aircraft equipped for its Premium Service cross-country flights between New York’s John F. Kennedy International Airport and Los Angeles and San Francisco. Continental doesn’t offer any broadband service.
That places United Continental at a competitive disadvantage to other carriers, particularly in the battle to draw business travelers, said Henry Harteveldt, travel industry analyst with Forrester Research Inc.
“It’s an essential must-have now,” said Harteveldt, after stepping off a five-hour United flight without Internet access, Tuesday. “United is competitively inferior to American, Delta, Virgin, Southwest and Alaska. If United wants to look at losing business, then not having Wi-Fi is a great way to lose business travelers.”
United Continental said it hasn’t yet negotiated a definitive agreement with LiveTV for Ka-band service, cutting-edge broadband that promises faster transmission speeds and will be provided via a satellite to be launched later this year.
That left the carrier some leeway to shift strategy as Wi-Fi technologies evolve, noted aviation consultant Robert Mann. “There’s a feel-good factor, but no obligation attached,” Mann said. “Meanwhile, they can watch for it (the new technologies) to settle.”
Itasca-based Aircell, whose Internet service is installed on about 6,000 aircraft, earlier this month outlined plans for a faster version of its air-to-ground technology, which relies on signals beamed from cellular towers. Aircell also announced plans to offer international Ka-band service by 2015.
“There’s a lot of exciting technology out there,” Smisek said. “By being not on the bleeding edge of it, but having sat back as we have, we’re able to take advantage of improvements to it.”
Since United and Continental merged last October to form parent company United Continental Holdings Inc., Smisek’s team has been selecting onboard services to be rolled out fleet-wide after the two carriers meld into a single entity to be called United Airlines later this year.
Executives have decided to keep United’s familiar “Rhapsody in Blue” theme music, install United’s roomier economy plus seating in all Continental jets and have stopped offering free snacks on Continental flights, a service United dropped years ago.
Frequent-fliers are closely watching to see how Smisek deals with the differing cabin configurations on United and Continental jets, given his vows to focus on business travelers at the new United.
While Continental is thought to have a superior business-class offering on domestic flights to United, it doesn’t offer first-class service on long-range flights to Europe and Asia like United.
Smisek said there were no immediate plans to ditch United’s first-class cabins. “I’m going to tell you we are going to have a mixed fleet for some time,” he said Tuesday. “There are markets where an international first class makes sense, markets where an international first class doesn’t make sense.”
Lie-flat beds and other service improvements are planned for United’s transcontinental flights, which target an elite clientele, Smisek added. “We’re going to significantly upgrade the interior of that fleet.”