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Southwest Airlines Co. (LUV - Analyst Report) announced that it will allow passengers to use their electronic gadgets during all phases of the trip. Allowing Wi-Fi service on board marks a landmark move for the budget carrier.

Southwest became the only U.S. carrier to provide gate-to-gate Wi-Fi service, which necessarily means that passengers can stay connected on their portable electronic devices from the moment they step on a flight till they exit.

Notably, last October, the FAA (Federal Aviation Administration) ruled that radio signals do not pose threats to aircraft safety and allowed U.S. carriers to provide Wi-Fi service during take-off and landing. Delta Airlines Inc. (DAL - Analyst Report) and JetBlue Corp. (JBLU - Analyst Report) were the foremost carriers to start the facility followed by four other carriers.

Unlimited use of Internet on board will be available on Southwest’s Wi-Fi enabled fleet at an unchanged price of $8 per day including stops and connections. Subscribers will be able to enjoy free live TV programs of DISH Network Corp. (DISH - Analyst Report) throughout the flight without any disruption.  

Southwest’s initial target of Wi-Fi investments was to allow customers Wi-Fi usage throughout the course of a trip and hence opted for a satellite-based technology, which powers in-flight options. At present, Southwest provides 435 aircrafts with Wi-Fi facility. However, the carriers have warned that bulky electronic devices that are larger than tablets, might pose danger due to their weight and size.  

Air carriers are adding novel features to their service and introducing products to improve passenger satisfaction and experience. Passengers prefer uninterrupted Internet during the course of the flight either to say connected or for television viewing. We believe this effort from Southwest will only add to the company’s ancillary revenues, which are increasingly becoming important revenue streams for carriers.

Southwest carries a Zacks Rank #2 (Buy).

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