Why is Gogo internet so expensive?

Why is Gogo internet so pricey? Photo: Gogo. 

Why is Gogo internet so pricey? Photo: Gogo. 

Have you wondered why Gogo onboard internet is so expensive?

About the best deal you can get is $49.95 for an unlimited monthly pass on one airline, purchased directly from Gogo. That's likely what you pay for an entire month of home service. And that's a deal. If you decide to buy by the flight or by the hour, prices go up considerably.

This is what blogger Chris McGinnis found on a recent Delta Air Lines flight. 

You may wonder why it is so pricey. The reason is not greed. Gogo executives admit that their service is bandwidth limited, so the company charges high prices in part to keep people off the system. On an average basis, only about 7% of airline customers use Gogo's internet. On a flight like the one McGinnis tweet about, Gogo may have charged so much to keep people off the system.

But change is probably coming as Gogo and its competitors develop better technologies. Here's how Gogo CEO Michael Small put it in a recent interview with Fortune:

There’s the hardcore frequent flier business traveler—we haven’t found their limit yet. They will pay anything and they would almost rather pay a higher price to keep the riff-raff off so they have all the bandwidth to themselves. Then there’s the general consumer, who says it’s too expensive and too slow. They say “I expect to get free Wi-Fi at Starbucks and why should I pay for this in the sky?”

Over time, we will find a way to engage 100% of the plane. Some people will be using something for free because the airline wants them to check their connecting gate. Some will be paying for a low-bandwidth service and some will be paying for the full boat. You would have to defy every trend on the ground for it to be anything other than 100%.

The full Fortune interview is interesting and worth a read if you have time.

Do you use Gogo? What do you think?