Seat-back phones are costly, and people have been using them less often now that they have cell phones, say American, Southwest and other airlines. So why is Verizon pouring more money into them?
In addition to making a call, these Verizon phones will soon be able to download large files or e-mail, a service that passengers want, according to Verizon Communications. Stewards could even use the onboard phones to connect to the Internet and verify credit cards, meaning cash would no longer be the only way to pay for drinks onboard.
Verizon believes there's a place for seat-back phones. But the decision to upgrade the Verizon "Airfone" systems on 2,200 airplanes, or 62 percent of all U.S. commercial airplanes, comes as airlines are cutting back on their high-speed Internet and phone line plans. The Sept. 11 terrorist attacks have created a more urgent set of priorities for airlines.
"It's a slowdown, not a movement away from the concept," said William Pallone, president of Verizon Airfone. "The whole issue revolves solely around what happened to airlines in the last five months. Airlines are trying to survive."
Verizon Airfone is the Verizon Communications subsidiary that sells phones to airlines.
In recent weeks, American Airlines decided to discontinue its AT&T in-flight phone service by March 31. Southwest Airlines started removing AT&T phones from its planes Aug. 1 last year. Tenzing Communications, which makes high-speed Internet equipment for planes, said many airlines are delaying projects to wire their fleets for high-speed Internet connections.
Verizon has a believer in Boeing, however, which is selling a "Connexion" Internet service. Boeing's plans to outfit three airlines were put on hold after Sept. 11. But a Boeing executive told analysts this week that airlines still seem to be interested in using the service, even though significant revenue is years away.