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Medium Market Entry New Product Launch Breakeven Analysis

WiFi in the Sky

#Airline
ProHub Comment

This case tests candidate ability to evaluate competing business models with incomplete information, conduct breakeven analysis, and identify key value drivers in a nascent market. Strong candidates balance quantitative rigor with strategic thinking about vendor selection, user experience, and rollout strategy rather than getting caught in technical WiFi details.

Estimated Time 15 minutes
Difficulty Medium
Source NYU
50 / 100
Your firm has won an RFP to help a domestic airline carrier examine their in-flight connectivity (IFC) strategy. With 80% of US-based aircraft already outfitted with IFC technology and competitive pressures rising, offering WiFi service is becoming table-stakes. Your client has yet to enter the game, but they know it’s something they need to consider to stay competitive. What are some of the key things the client should think about when assessing their go-to-market strategy for IFC?

Clarifying Information

  1. The airline files primarily domestic routes within the continental US, as well as select flights to Canada, Mexico, and the Caribbean
  2. IFC includes only WiFi connectivity. In-flight entertainment (IFE) is delivered via an on-board server through a separate system, but the two can be integrated into one user experience
  3. The airline’s main objective is to stay competitive
  4. RFP = request for proposal
  5. Airline has 90 planes and services ~30K flights per year
  6. IFC is typically installed and managed by an outside vendor, either through a branded service (e.g., GoGoAir) or a wholesale, white label solution (e.g., Row44). Contracts are typically 10+ years long.
  7. Different vendors use different technologies, which vary in quality
  8. Total bandwidth is shared across passengers, so the more passengers buy a session, the slower the service (some carriers intentionally charge high prices to limit usage and ensure better service)