ViaSat Brings More Competition and Faster Speeds to the In-Flight Wi-Fi Market

When ViaSat pitched American Airlines not long ago, executives at the satellite Internet company made their usual argument. They promised they could deliver reliable high-speed Wi-Fi, similar to what passengers have at home, at a reasonable cost to the airline. American's executives were skeptical. Other airlines had heard similar assurances before, and not all connectivity companies could deliver. An airline would not want to tell passengers they could stream video, only to learn the system would get overloaded during peak periods, or not work at all over some areas of the United States. "Why should we believe you?" American executives asked, according to ViaSat President and COO Richard Baldridge. "Everybody comes in here and gives us a good presentation." ViaSat was prepared. Unlike its main U.S. competitor, Gogo, ViaSat does not have a test plane, so Baldridge asked American's executives to buy a ticket on JetBlue Airways or United Airlines, two of ViaSat's key customers. JetBlue uses ViaSat fleetwide, while United has it on more than 300 of its aircraft. Virgin America is another customer, but it only has it on 10 aircraft. "Go fly on an airplane and see how it performs," Baldridge said, recounting the pitch in an interview at ViaSat's Carlsbad, California headquarters. "Don't believe us. By the way, don't believe anyone else, either. Anybody can do anything with one airplane. You can't do that with 1,500 flights a day. You can't fake it." ViaSat won a portion of the business, beating Gogo for the rights to install its service on 100 new Boeing 737 Max aircraft, the first of which should fly by late 2017. Gogo retains the vast majority of American's business, and it even won a contract to add its new satellite service called 2KU on 134 of American's narrowbody jets at the same time ViaSat got its big news. But for ViaSat this was an important victory. It had won a contract with the world's largest airline, a carrier that had been Gogo's first customer in 2008. Baldridge said it was validation of an argument that ViaSat had been making for years. Airline passengers want the Internet on planes not just to check email or access a virtual priv