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The Honolulu Advertiser
Posted on: Saturday, November 28, 2009

Row 44 gives in-flight Internet wings


By W.J. Hennigan
Los Angeles Times

LOS ANGELES — Billions of dollars and scores of top engineers with the world's largest aerospace company couldn't get it to fly.

But a 25-employee company in Los Angeles may have found a way to make in-flight Internet take off.

Row 44 is outfitting U.S. airlines with inexpensive devices that allow passengers to access the Internet while flying. Earlier this year, Southwest Airlines Co. and Alaska Airlines began offering Row 44's service.

It isn't the first time wireless Internet has been offered on an airline. In 2000, Boeing Co. launched an Internet system called Connexion for large airliners. But after sinking more than $1 billion into development, few passengers were willing to pay the $30 connection fee. Several international carriers were offering the service on a handful of long-haul flights, but Boeing pulled the plug in late 2006, saying the business wasn't financially viable.

So why does Row 44 think it can succeed when an aerospace giant, with significantly deeper pockets, fell short?

For one thing, Row 44 didn't have to build a multibillion-dollar satellite system. It's piggybacking on an existing network. Also, the size of the company has allowed it to quickly adopt the latest technological advancements that have made equipment lighter and cheaper.

And because many people carry Internet-ready devices, demand is higher than ever, said Tim Farrar, president of consulting and research firm Telecom Media and Finance Associates.

Row 44 is named after the last row on a DC-10 commercial jet, considered the most uncomfortable part of the plane because the seats are in front of the bathroom and don't recline. Row 44's in-flight Internet could make flying more enjoyable — even for the unlucky folks in the last row.

The company got off the ground in 2004 when co-founder Gregg Fialcowitz, also the president, was launching CopperVision, a satellite TV provider. Through the endeavor, he formed a relationship with Hughes Network Systems LLC, which operates a network of telecommunications satellites.

As Fialcowitz became more familiar with the technology, he was struck with the idea that Hughes' satellite technology could apply to airliners — one of the few places at the time that did not have Wi-Fi capability.

He shared the idea with his friend, John Guidon, a British technology entrepreneur with a private pilot's license.

The pair approached Hughes about using its satellite network for in-flight Internet.

Hughes liked the idea.

Row 44 "opens up a worldwide opportunity for Hughes to supply our advanced broadband satellite technology and services," said Arunas Slekys, Hughes' vice president of corporate marketing.

But Fialcowitz had to convince airlines and investors that Row 44 isn't Boeing's Connexion.

Row 44's equipment weighs about 150 pounds; the Connexion equipment weighed about 1,000 pounds, adding to airlines' operating costs.

The total cost of equipping a plane with Connexion ran close to $1 million. Row 44 costs about $200,000.

And another big difference was that Row 44 could outfit its technology on narrow-body aircraft, Fialcowitz said. Because domestic carriers mostly fly single-aisle planes, "Boeing essentially locked itself out of the domestic market," he said.

That helped draw Southwest, the United States' largest carrier in terms of number of passengers flown, and Alaska.

Under the agreement with Row 44, airlines decide what to charge passengers for the Wi-Fi connection and pay Row 44 for providing the service. The company declined to say what it charges.

The carriers said they are testing pricing options. Some passengers have been charged up to $12, but the airlines have been trying out lower prices to see what entices the most users.

Farrar of Telecom Media cautioned that although Row 44's service is innovative, the company's profitability depends on how much people are willing to pay.

"There is a huge appetite for online entertainment right now," Farrar said. "It's just hard to get the everyday passenger unless the price is low."

Row 44 isn't alone. It is facing stiff competition from Aircell, which uses a network of ground antennae to establish a link with the airplane.

Aircell is available on all Virgin America and AirTran Airways flights and on some American Airlines, United Airlines and Delta Air Lines planes. Aircell charges $6 to $13 for a typical session.

But Aircell has limited coverage, analysts said. The service is available only over areas with ground antennae, so overseas flights are out.

"One of the most attractive aspects of Row 44's technology is that they provide access to some of the harder-to-reach places," said Bobbie Egan, spokeswoman for Alaska Airlines. "This was really important for our airline because we fly over water and land."

Fialcowitz hopes his company's ability to provide worldwide Internet access will favor Row 44.

"I believe we will become the dominant player in providing in-flight broadband connectivity for the global market," he said. But he added that for now, "it's land grab out there."