Venturing where only low-cost carriers have gone before, Continental has become the first big legacy airline to offer satellite TV, a move that could push its peers to follow suit at a time when competition is the fiercest it’s been in years.
Since April, Continental has installed DirecTV on 18 planes. By early 2011, the airline plans to have 77 channels of live TV available to passengers flying domestically on about 220 of its jetliners.
It joins JetBlue, Virgin America and Frontier in offering passengers the chance to watch live sports, news and other programming on TV screens at their seats instead of programs taped earlier.
JetBlue and Virgin America offer the TV service for free. Frontier charges $6 to all but premium-fare ticket holders and some members of its frequent-flier club. Continental is charging $6 in coach and letting first-class passengers get the service free.
Continental executives hope the offering will set it apart and attract more passengers.
“I think it does distinguish us,” says Jim Compton, Continental’s executive vice president of marketing, who says the carrier is offering more satellite channels than its counterparts are. “Having an industry-leading product … will draw a better customer share to us.”
Airlines are scrambling to get passengers in the midst of the economic downturn, and several carriers including United, Delta and American have begun installing Wi-Fi Internet service on their planes with the hope that the high-tech perk will lure customers back into the air.
Satellite TV has been slower to catch on, mostly because of the high cost that comes with retrofitting older planes or installing the technology on new aircraft, say satellite and airline experts.
“It’s an expensive proposition,” says Nate Quigley, CEO of LiveTV, the JetBlue-owned subsidiary that provides the satellite-receiving system for Continental, JetBlue and Frontier. For airlines, “The big question comes down to will it pay for itself … with customer loyalty, in load factors?”
Installation can cost $1 million to $1.5 million a plane, Quigley says. That’s in comparison with $100,000 to $250,000 for Wi-Fi capability.
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