Missed Connexions

Published 9:00 pm Wednesday, July 26, 2006

Boeing’s experiment as an aerial Internet service provider seems to be over, based on hints CEO Jim McNerney and CFO James Bell dropped during Wednesday second-quarter earnings conference call.

I’ll admit to being a huge fan of Connexion. (Oh but life would have been so much easier if the recent round-the-world trip to look at 787 suppliers had been on plane outfitted with it.) I’m hoping Boeing can find a buyer who can get the service on more airlines.

But Boeing execs aren’t nearly as enamored.

While acknowledging that “the technology is performing reasonably well,” McNerney added that “the airlines have not aggressively adopted this service to anywhere near the extent that we had hoped.”

“The facts are that our business model is not being met,” he said. “We’re taking a good swing at this business and we’re falling short of where we want to be which is why we’re asking a a series of fundamental quesitons now on a going-forward basis.

“Continuing to operate as we are now is not an option,” McNerney continued. “All elements of the business model are falling short of the projections.”

Bell told analysts and reporters that selling or shutting down Connexion would cost the company $350 million, which would be charged against 2006’s earnings. But on the other hand, Boeing would be more profitable in 2007 without Connexion’s drag on profits.