Playing the Wireless Card: Airlines Rush to Add Wi-Fi

After years of experimenting with drop-down televisions and expensive seat-back monitors, airlines are looking to entertain passengers on the screens the travelers bring with them. The shift has led to a thriving market at 30,000 feet to provide Wi-Fi, movies and TV shows on travelers' smartphones, tablets and laptops.

About 1,260 aircraft, or more than a third of all mainline passenger airplanes in the U.S., now offer passengers Internet access to surf the Web and check email. The connection can be accessed at 10,000 feet, the federal minimum altitude to use portable electronics. By 2013, well over half of all passenger planes should be connected. And at least four companies are competing to provide Wi-Fi service, aiming to stand out with such offerings as on-demand movies and live television. Amid their continuing economic struggles, airlines are investing in Wi-Fi to satisfy the need of many customers to be plugged in all the time, as well as their own need to tap a new source of revenue. Wi-Fi "is more expensive and cumbersome in the air—it's not like sticking it in your local Starbucks. But we think ultimately that's where the market is going," says Jeff Smisek, chief executive of United Continental Holdings Inc., which announced a Wi-Fi agreement in March for more than 200 Continental aircraft and is requesting proposals for the other 500 United and Continental planes.