When good business decisions go bad

Usually a company will make a business decision, evaluate, and then implement. I’m going to pick on a company that I personally love, because they are about to do this very thing. But they made the wrong decision. It’s about Alaska Airlines and their commitment to WiFi aboard all of their planes.

Yeah, on-board servicing is good.  Airlines make billions of dollars in “add on” fees.  In 2009, the largest airlines combined to make almost eight BILLION ($8,000,000,000) in fees ALONE!  So adding something like WiFi, which is a nominal amount of capital for a large return, is a no brainer.  Alaska tested a service called Row 44 for their WiFi service on N644AS, a 737-800.  And it was GOOD.  Excellent service, because it was satellite based, not ground-transmitter based.  I used it, several times.  Blazing speeds, perfect results.  I was even able to stream video from my home television via my Slingbox, and had PERFECT service.  How’s that for watching an NHL playoff game on a plane that has no onboard entertainment, sans digEplayer units that contain static content?

All was perfect.  Customers were happy.  Customers were able to use the service no matter where Alaska flew.  And then Alaska grew.  They weren’t only going to be in Alaska and the “lower 48” (plus Mexico and Canada), but as of this fall, 10% of their market will be service to Hawaii, from several West Coast cities.

And then Alaska threw out Row 44 in favor of Aircell.  A service that is LAND based.  A service that means NO service on flights to Hawaii.  And problems outside 100 miles of the 48 states, so as for Mexico and Canada service, not so much.  And even flights to the namesake state of Alaska will be hampered until you are in US airspace.

What kind of plan is that?  It’s a plan that’ not so good.  When you are going to admit that you are already going to cut out profit potential by about 15% to 20% (10% Hawaiian service, probably another 5% to 10% in service to Mexico, Canada, and travel to Alaska via Canada), that is a business model couched in failure.  But why are they doing  it?  Well Southwest wants to get their planes outfitted with Row 44.  So Alaska is going to get on the Aircell/GoGo In Flight Internet bandwagon along with American, Delta, blah blah blah.

Add WiFi to planes.  Good.  Sacrifice a good business plan for an asinine reason?  Come on, Alaska.  You’re better than that!

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