On my West Coast trip last week I had wifi on my American Airlines flights both to and from SF.  According to an article in the New York Times, by the end of 2009 the service will be available on 1,000 planes domestically and the target is 2,000 planes by end of 2010.   I was struck by a few things:

• The article made no mention that a previous attempt to equip planes with wifi had failed with Boeing shutting down its Connexion division in 2006.  At the time I was really surprised because it seemed like such a no-brainer.  The economics now certainly seem compelling [that is if you read the installation cost wrong!].  According to the NYT, the cost of installation is $1,000 [ouch: totally misread the cost is $100,000 which makes a lot more sense].  For cross-country flights the current charge is $12.95, similar to what many hotels charge.   Assuming that only 8 people buy the wifi on every flight, it would still only take 10 flights to recover the cost [so it would actually take 1,000 flights at 8 people – which is well over 1 year of flying and that’s not counting bandwidth.  Clearly need to get to much better utilization for it to make sense.  At 20 users per flight it would be a bit under 400 flights].

• Bandwidth on my flights was great, maybe due to the pricing and few people using it, but I had no problem streaming audio at all and even video streaming worked just fine.  Based on tweets from folks I follow that seems to be generally true.  Even latency, which I would have thought might be an issue, seemed decent.

• As far as I am concerned, that makes wifi the perfect inflight entertainment solution.  I bought a 13 inch laptop on purpose because it is usable even in economy with the person ahead of you reclining their seat (ok, you have to recline your own seat also, but it works).  I can listen to streaming music while I work and when I get tired of working I can run Boxee and watch streaming video.

• It also means I can be more productive.  Many of the emails that need answering require me to access the web to look something up.  Prior to wifi, I could only get through those emails that did not require getting additional information.  Some folks have regretted the loss of the last bits of “unconnected” time, but flying in order to avoid the potential distraction that is the Internet always seemed like a bit of an extreme solution to me.

Now the thing I really want to try on my next flight is sharing the wifi connection back out through my MacBook and then seeing if I can place a call with my T-Mobile BlackBerry.  This works extremely well for me at home, but it will put the latency of the system to an interesting test.  Now let’s hope my transatlantic flights and from London this week will have wifi!