3 airlines opt out of Boeing Internet venture

Associated Press

SEATTLE — With new priorities since the Sept. 11 terrorist attacks, including simple survival, three U.S. airlines have dropped out of a planned joint venture with Connexion by Boeing to develop high-speed Internet access aboard jetliners, Boeing confirmed Thursday.

The project, proceeding with German launch customer Lufthansa, aims to let passengers check e-mail, surf the Internet and even watch television on board jets in flight.

Boeing plans to install and test the service in some Lufthansa planes by late next year or early 2003, spokesman Terrance Cook said Thursday.

After it’s been refined, "then the plan is to roll that service into 80 of their long-haul aircraft," he said.

In June, Boeing and three U.S. airlines — American, Delta and United — announced plans for a joint venture to install broadband access in 1,500 airplanes, 500 per carrier, with availability beginning in the second half of 2002. The service would cost a passenger about $20 an hour.

"We went off and put in two solid months of work to bring the service forward," Cook said Thursday in a telephone interview from Boeing offices in Irvine, Calif. "And then Sept. 11 hit. As you know, the world changed."

Many Americans have not flown since the terrorist attacks, which used four Boeing passenger jets as flying bombs in assaults on the Pentagon and New York City’s World Trade Center. Airlines have since drastically reduced schedules and sidelined aircraft, struggling for profitability and, in some cases, survival.

"We continued discussions even after Sept. 11 to try to find a path forward," Cook said.

"But it became increasing evident they had new priorities as a result of what was happening to the airline industry," he said. "We clearly did not want to become a distraction to them. So we subsequently came to a mutual agreement to suspend formation of the joint venture."

In an interview with The Associated Press last month at Boeing’s new Chicago headquarters, Condit said the primary market for Connexion by Boeing may now be the federal government.

The program’s focus "clearly shifts," Condit said, to take on "much more of a government and military focus. The ability to get broadband data, TV, video, on and off of airplanes is clearly something that is broadly of interest to the government."

After Sept. 11, Connexion by Boeing eliminated 200 of its 600 positions and shifted its focus to security applications.

In October, Seattle-based Tenzing Communications, another in-flight Internet access provider, laid off 80 people, about half its staff, citing the industry slowdown. Tenzing is 30 percent owned by Boeing rival Airbus Industrie.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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