Four years after launch, why hasn’t in-flight Wi-Fi caught on?

Even after four years, Wi-Fi on planes has a long way to go to prove successful. According to consulting group In-Stat, it’s estimated that only around 7 percent of US commercial airline passengers used in-flight wireless in 2011 — up from 4 percent in 2010, but still not enough to be profitable. But while this is certainly disappointing to airlines and internet providers, it should hardly come as a surprise. Only 16 percent of US commercial flights had Wi-Fi in 2010, and service is often unreliable, especially for a service people are used to getting for free on the ground. As a result, usage is largely limited to people who need to stay connected for business reasons, even when cost and service are unfavorable.

So what can be done to improve the prospects of in-flight internet? An obvious answer is simply expanding the service. But since adding Wi-Fi to a single plane can cost up to $100,000, it’s difficult to justify when short-term revenue is relatively low: around $155 million in total airline internet fees were collected in 2011. There’s also virtually only one in-flight Wi-Fi provider — Gogo — although competitor Panasonic Avionics recently won the right to equip United planes. As more planes are refitted with internet and amenities like power adapters, Wi-Fi revenue is expected to jump. But unless it’s on significantly more flights in the next few years, we can’t see usage numbers rising as quickly as airlines want.