The latest step in United’s upgrades to its wifi portal solution is live and it brings a new angle to the purchase process: customers can now purchase wifi using their MileagePlus points rather than a credit card. The service is rolling out today on the 360+ aircraft equipped with the Panasonic Avionics Ku-band satellite connection; it is expected to expand to the other connectivity platforms as the portals across United’s multiple providers are consolidated to a common system.
United had previously integrated purchases into the MileagePlus profile of passengers, allowing the use of stored credit cards and facilitating the transfer of service between multiple devices from a single payment.
As the portal development progresses the company expects to offer subscription plans rather than per-flight pricing; this has been a sore spot for many frequent travelers. The company recently suggested that mid-2016 is the likely target for such.
It also may prove counter to the path being taken by Panasonic, the largest satellite-based airline connectivity provider today. Company VP Global Communications Services David Bruner has not been shy about pressing for per-consumption pricing versus flat-rate options, believing that leads to “a more fair transaction with all customers”.
But Bruner is not opposed to a package deal in general. He believes that such a move could come with customers buying larger blocks of data, similar to mobile phone plans, and using that capacity over time. In such a plan Bruner believes the airline would need to facilitate the transaction, saying:
“Rather than us creating a Panasonic application and you flying on this carrier and that carrier, it really is better if they associate that with the airline and we’re in the background, because that’s the brand they want to – and in fact – they trust.”
As for the new pay with miles solution, the pricing is on par with some other retail options MileagePlus has made available. While stressing that the price points will fluctuate as it studies take rates and other factors United shared some recent examples with RGN. A short flight from San Francisco to Los Angeles offered 15 minutes of connectivity for $1.99 or 310 miles; the full flight priced at 4.99 or 770 miles. A long-haul flight from Houston to Tokyo-Narita offered 1 hour for $4.99 or 770 miles; the full flight there was $21.99 or 3,390 miles.
The company is no stranger to using its points as currency for retail transactions with the per-point value varying depending on the product and the customer. Its initial exercise with airport concessionaire OTG at Newark yielded a rate of ~0.7 cents per point. The price examples included above are similar to that valuation, coming in around 0.65 cents per point. This compares favorably with the 3,500 points Lufthansa customers pay for one hour of connectivity on a Panasonic-provided system today.
Ultimately this is about providing more options for passengers, both to access the in-flight wifi solution and to spend their MileagePlus points. And that should make for happy customers.
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