A deal between Southwest Airlines Co. (LUV) and Dish Network Corp. (DISH) will provide the flyers of the airline free live television service on their own Internet devices including phones, tablets or laptops. This pact calls for Dish Network to pay for the services on over 400 Wi-Fi-equipped jets at the end of the year.
Passengers of Southwest planes can avail various television programs on Fox News Channel, MSNBC, CNBC, Bravo, NFL Network, Food Network, HGTV and Travel Channel, in addition to 75 on-demand shows. Earlier, the airline offered a similar service for $5 per day.
However, this service does not include the passengers’ access of Internet, for which the airline charges $8 per flight. Southwest provides Internet connection to over half of its fleet using Row 44 – a subsidiary of Global Eagle Entertainment Inc.
To make this offer more interesting, Dish will extend 12,500 frequent flier points to Southwest members who sign up for the Dish Hopper Whole Home DVR and home programming scheme. Along with this, the second largest satellite service provider of U.S. after DIRECTV (DTV) will also offer an Apple Inc. (AAPL) iPad or a discount of $250 on Hopper subscription.
This initiative is part of Dish’s marketing and promotional strategy of exchanging the service – TV Flies Free – with its advertisements throughout Southwest’s air travel. The promotion would include confirmation emails, airport billboards and 30-second commercials on television.
We believe that the addition of these attractive and novel offers will push Southwest ahead of other carriers and strengthen its position in the global scenario. These will also increase the value and profitability of the company by brining in more customers under its wings.
Southwest currently holds a Zacks Rank #3, implying a Hold rating.
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