Report Predicts $100m in In-Flight Internet Revenue in 2010

In-Stat says $95m in revenue will be taken in, almost entirely by Aircell, in 2010: That's a fair amount of money for the first year in which a substantial number of planes across multiple airlines are in operation, but still doesn't represent a lot of usage overall. Delta still represents the lion's share of equipped planes, even as other airlines have signed up, typically in a more limited fashion for the large operators. (Virgin America and AirTran have equipped their entire fleets, but those fleets are quite small.)

Let's run the numbers. Aircell charges from $5 for a red-eye session to $35 for a monthly unlimited usage pass across the network. Let's assume the average transaction fee is $11.

Aircell is nearing 1,000 planes equipped with Gogo Inflight Internet, and one assumes as that number has gotten higher, revenue has increased at a higher pace. So let's average the year's use across 800 planes (assuming several hundred more planes by year's end).

Take $95m and divide it by 365 days. That's $260K per day. Divide that by $11, and that gets you 24,000 sessions per day. Divide that by 800 planes and you get 30 sessions per day on average per plane. Some planes are flying short hops (Virgin America's West Coast routes), and others are heading cross-country on 5-6 hour missions. Planes are being turned somewhere between two and five times per day, so divvy up those 30 sessions per day per plane into flights.

That would means somewhere between 5 and 15 sessions per equipped plan per flight. I'm making a very rough calculation, but it makes sense.

As usage goes up, average revenue per user will increase, but eventually taper off: frequent travelers will opt for the $35/mo rate (probably negotiated lower through corporate bulk purchase deals).

By the number In-Stat is estimating and my logic above, it seems that achieving $500m/yr in revenue could be achieved by 2014 both by doubling the current size of the fleet, and increasing casual and business usage.

Aircell and its partner airlines have rarely disclosed much in the way of exact usage, session numbers, users per flight, or other financial or session data.

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