This Flight Is Being Delayed

When Softnet Systems retrenched on its ambitious and expensive plans to offer high-speed Internet in airports via wireless networks, it left many airlines that had signed on for the service holding worthless press releases.

Prohibitively high costs — about $500,000 to wirelessly enable one airport — plus hassles in dealing with airport management led to cancellation. Now, United Airlines, one of SoftNet's customers, will say only that plans are still on, but there are "no definitive" details on actual rollout of wireless Internet services into its terminals.

"The airlines are cautious," says Carter Morris, executive director of Wireless Airport Association, an organization trying to expand wireless initiatives in airports. "It came as a shock that they were going away."

But wireless access isn't the only service that's been as bumpy as a turbulent plane ride. Wired Internet on airplanes, and in airports, has been hit equally hard.

While Virgin Atlantic and Tenzing Communications say they're forging ahead with their $50,000-per-plane investment to offer Internet and e-mail services to passengers starting in 3Q, others have retreated from similar plans. Rockwell Collins, a unit of Rockwell International, recently pulled the $35 million plug on plans with News Corp. to offer in-flight e-mail and Internet access.

Wireless access players like MobileStar, which signed a deal with American Airlines, and Wayport have continued in their attempts to service the country's 3.7 million business travelers, while others like SoftNet have fled the wireless access terminal space altogether.

"In the early stages, the thought was that Internet access to airports was a cash cow — just put in a T1 connection and let money roll in," says Adrian Van Haaften, CEO of Laptop Lanes Aerzone. "The reality is not so very easy."

Plugged-In Passengers

One of the big reasons for departing from the Net airport business is that with the "heavy belt" syndrome from pagers, cell phones and Palm Pilots, travelers come to the gate already well connected.

Another big challenge for service providers trying to get in front of business travelers is dealing with airport personnel that have their own agenda. After all, airports are trying to structure their own IT plans to ensure they don't suffer from the same hemorrhaged revenue models that plagued the pay phone industry as cell phones proliferated.

Meanwhile, the market for Internet kiosks at airports has hit the skids mainly because airports relegated them to remote spots where business travelers can't find them, says Dave Gonsiorowski, president at Web-Raiser Technologies, a maker of Internet solutions for kiosks.

"The critical success factor is location," he says. "But I'm not sold on the airport model anyway, because for the most part, the business traveler is wired."

Service providers also have learned the hard way that they need to offer more than casual surfing to the time-crunched traveler. "The pure kiosk play model is dead," says Tom Bokowy, director of sales and technology at Get2Net, which offers free access to Internet kiosks subsidized by advertising revenue.

Bokowy's theory tends to be supported by the fact that some airport managers are making deals with big-name space vendors like Starbucks, which appears to have Internet access plans of its own.

Starbucks announced plans earlier in April to provide wireless Internet LANs with MobileStar this spring, and placements in various Starbucks airport franchises is a distinct possibility.

WAA's Morris says the organization is developing guidelines it hopes to have in place by 3Q to help airports decide on future technologies in an equitable manner.

"Everyone wants to make this happen," Morris says. "It's a question of doing it right the first time so we don't have another SoftNet."

Copyright © 2004 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in The Net Economy.