Delta has claimed that it will be first to offer Wi-Fi on all of its mainline planes. But at least five other carriers — AA, Southwest, Alaska, Virgin, and Jet Blue — have tests or projects underway.

AA is expected to launch on three planes in August from Aircell, the same vendor that Delta is using.

Aircell works by using wireless connections between planes and antennas on the ground. Delta said its version will cost passengers US$9.95 on flights of three hours or less, and US$12.95 on flights lasting more than three hours. Passengers with Wi-Fi-ready devices will be able to access the Internet, corporate VPNs and their e-mail directories, as well as instant messaging and SMS.

No voice services will be available, in keeping with federal rules prohibiting in-flight phone calls.

Although Delta’s announcement is the most upfront yet, some question whether Wi-Fi will prove to be very popular as the U.S. economy lags and travel budgets are tightened. Despite the downturn in the economy, however, airline execs believe that offering Wi-Fi will help distinguish their companies from competitors and add some revenue at a time when many carriers are reducing the number of their flights.

Of course, if they all have it, then advantage is lost, a la motels. Five years ago, travelers were seeking out the few hotels and motels that offered  Internet access. Now, you can’t find one that doesn’t.

Such is the nature of innovation and change anyway. First to market gets the prize. But not for long…

Many airlines already have a charge, often $25 or so, to check a second bag. Now you will be unable to carry anything for ‘free’ except your carry-ons and you can look for them to start limiting there as well, forcing some of that into the for fee department.

All of the fees for ‘extras’ like food, pillows, headphones, etc. which have all gone into the ‘it’ll cost you’ department are a part of what is known as ‘unbundling’. That hearkens back to the telecom companies who seem to have invented the concept. As times got tighter and profits diminished, instead of raising core prices, they would just remove something from the core service that you got for free, unbundling it, and then charging extra for it. So they could always claim their core services weren’t going up (they just included less).

Airlines are going down the same road, fueled by competition and skyrocketing oil prices, which are at $130 with no end in sight, it seems. They can’t raise prices because the market is so competitive and fliers have such instant access to price comparisons, they will lose customers quickly. So they have to take a circuitous route to accomplish the same thing…higher prices.