American Airlines Hunting Competitive Edge With In-Flight Streaming



American Airlines (NYSE:AMR) is trailblazing into the new business of in-flight streaming, an effort to heighten consumer intrigue at a time when skyrocketing oil prices and still-soft consumer sentiment continue to threaten airline profits.

American claimed the pay-per-view move makes it the first North American airline to offer in-flight streaming video entertainment options, allowing customers to wirelessly stream content such as movies and TV shows from the jet’s digital library to their personal WiFi enabled devices.

While higher fuel prices have forced airlines to raise fees, their fares often remain consistent with rivals, forcing companies to improve in-flight entertainment and services as a away to capture a competitive edge.

American and its partner Aircell said they will begin testing the new video system on two Boeing (NYSE:BA) 767-200 aircraft in transcontinental service, and plans to begin customer testing early this summer.

The goal is to start rolling out the product on WiFi enabled jets starting this fall, pending approval by the Federal Aviation Administration. Prices were not disclosed.

“American was the first North American airline to launch in-flight WiFi, and today we again set a new industry standard as the first domestic airline to test in-flight streaming video content,” Rob Friedman, American’s vice president of marketing, said in a statement.

The streaming video offering will be powered by Aircell’s air-to-ground system, which uses three small antennas installed outside the aircraft. The antennas connect to Aircell’s exclusive nationwide mobile broadband network.

Complimenting the new initiative, American said it will work with Aircell starting this summer to expand in-flight WiFi on the remaining aircraft of its domestic fleet, including 93 of American’s domestic 757s, up to 50 additional MD80 aircrafts and all its 737-800s.

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