Why You Always End Up Paying Too Much For In-Flight WiFi

Blame your brain.

Surfing the Internet while flying used to feel like a modern miracle. But in the decade since airlines first began rolling out the service, we've come to expect that most flights will have some kind of web access. 

Checking email, Facebook and Twitter from the air has begun to feel like an essential -- one we're willing to pay for. 

Gogo, the most prevalent provider of in-flight WiFi in the United States, has more than doubled its connectivity prices on some of its routes, as the New York Times' Brian X. Chen reported this week. For example, someone flying from San Francisco to New York can expect to pay $28 to $40 for Internet access during the trip -- up from $18 in 2012. 

That's more than an in-flight sandwich or movie. So what gives? Why are we willing to pay so much to stay connected during a flight? 

In part, prices are high so that we don't all connect. If every passenger on a plane purchased Gogo's Internet, the service would slow way down, says Steve Nolan, a spokesperson for the company. (This this is liable to change soon. On Monday, the Federal Aviation Administration approved a new technology to allow Gogo to deliver broadband speeds about 20 times faster on flights.)

For now, Gogo keeps speeds quick by using a practice called dynamic pricing, which shifts fees according to conditions that ratchet up demand. On days with lots of business travelers, who will expense almost any amount to access the Internet, Gogo raises its prices. For example, lots of people travel for work on Mondays, driving up demand for in-flight WiFi and bringing the price with it; WiFi tends to be cheaper on Saturdays, the least popular day for business travel. Thus, WiFi might cost $40 on a Monday flight from New York to Los Angeles and only $28 on Saturday. 

"If we didn’t price the product different on certain routes it would be completely unusable," says Nolan. 

But this doesn't explain why some companies -- like Norwegian, Turkish Airlines and Jet Blue -- are able to offer free WiFi to all passengers without experiencing massive outages. "I would ask those providers just how well that's working for them and if they get a lot of complaints," says Nolan.

I did. Carly Odonnell, a spokesperson for Norwegian air, said that although the amount of customers using the Internet can sometimes slow down service, in general  customers seem happy. "I mean, it's not something we get a great deal of complaints on from our customers," she tells me. "It comes as a surprise to a lot of people." 

So maybe there's something else behind those sky-high prices. 

Nathan Novemsky, a professor of marketing and psychology at Yale University, explains that there's a fluidity to what people are willing to pay for particular services, and this depends largely on how they justify it to themselves. "If you're a business traveler, $8 an hour is not a lot of money to be able to work in your office," he says, especially if you're expensing it to your office.

Vacationers, Novemsky says, can often find justifications that are similar to those used by their working peers: "Wouldn't you pay $30 or $40 not to be bored on a flight?" 

It all comes down to a behavioral economics theory called loss aversion.

Psychologically, people experience losses much more powerfully than gains, which is why studies show that most people would much rather avoid losing a chunk of money than receive that same amount down the line.  

As we become more used to being constantly connected to the Internet, being cut off for a six-hour flight begins to feel like a loss. According to Novemsky, most people are willing to pay a premium if they're trying to avoid losing something. 

"When I'm used to connectivity all the time and then you take away Facebook or email or whatever, then I'll pay twice as much to get it back," he says.  

Novemsky surmises that some business travelers don't even need the Internet for work. They're logging in because being connected feels comfortable, and they can justify paying for it because of "work." 

"There's some work you literally can't do without the Internet -- sometimes you need to get that work done, and it's urgent," he says. But it's difficult to know how often travelers are signing up out of need, or just using the web because it makes them comfortable. 

"Sometimes they're fooling themselves with these arguments as much as anyone else," says Novemsky.  

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