The Boeing Co.’s aerial Internet service may finally be poised to take off, two years after the post-Sept. 11 airline slump crushed the company’s initial launch plans.
Last month, Connexion by Boeing signed deals with Japan Airlines to install its equipment on 10 long-range Japan Airlines planes, with an option for 58 more. It also reached a preliminary agreement with Singapore Airlines to install the service on 40 of its planes.
That gives Boeing’s service five firm or preliminary orders, with the first units going to launch customer Lufthansa in March.
That’s still well below Boeing’s initial projections in the summer of 2001, when it appeared Connexion service would be offered in as many as 1,500 planes starting in 2002.
But global marketing manager Stan Deal remains upbeat. The two-year delay has led to improvements to the system, he said. That is making it more attractive to airlines, which just now are rebounding from the worldwide industry slump and starting to look for new ways to lure passengers aboard.
"They’ve been focused on cost-cutting," he said. "Now you can see them start to focus on how to stimulate revenue. Connexion is one of those features that can differentiate an airline."
At a basic level, Connexion is wi-fi in the sky — a system of hardware and software that allows airline passengers to hook their laptop computers into the Internet from their seats, connected to the Web via a dedicated antenna that beams data through a satellite network to the ground. The broadband technology allows users to send e-mail and surf the Internet at speeds similar to a high-speed dial-up modem on the ground.
Boeing is not the only aerial Internet service provider. Several companies, most notably Tenzig Communications of Seattle, came into the market first with systems that allowed users to send and receive text messages or e-mail, and to browse through a selection of Web pages stored in an on-board computer.
What was different about Boeing’s effort was that it promised complete broadband access to the Internet at the outset, unlike other systems that started small.
All were rushing to get on the market in 2001. Boeing had formed a joint venture with three U.S. airlines, American, Delta and United, to run Connexion, and had signed Lufthansa to be the launch customer, its planes to be the first of 1,500 to be outfitted. Then came Sept. 11, and "the whole market took a step back," Deal said.
Boeing’s U.S. partners dropped out of the venture. Lufthansa remained in place, but Boeing scaled back its effort, and didn’t have a prototype ready for a commercial market test until earlier this year.
The delay helped Boeing find new uses for Connexion, Deal said.
Once the broadband pipeline is installed on the plane, it has the capacity to carry more data than just that required by Internet users in the cabin. That means there’s room for airlines to use for themselves, to send flight crews real-time Internet weather updates, for example, or even to teleconference with health care professionals on the ground in case of medical emergencies.
Boeing’s Connexion group also is working with other Boeing divisions on its Airplane Health Maintenance initiative, under which maintenance data gathered by the plane itself is transmitted to the ground in flight, so that mechanics can meet the plane at the gate with any needed spare parts. The system will help airlines to better-schedule routine maintenance, Deal said.
And Boeing has formed a partnership with Rockwell Collins to develop a Connexion service for smaller business jets, which will include the capability to hold Internet videoconferencing while airborne, which "takes a business jet and turns it into a true office in the sky."
Seven private jets already are flying with Connexion installed, he said.
Without the broadband capacity, "we’d never be able to take advantage of these things," Deal said. "Our competition never looked at the market that way. We think we’ve chosen the right path."
So far, Connexion is getting good marks from users, who tried it out during three-month trials aboard Lufthansa and British Airways jets. Users were so impressed that the World Travel Awards, an industry group, last week named Connexion the best in-flight Internet service.
The tests proved the technology works and that passengers are willing to pay extra for it, Deal said.
Final pricing is still being negotiated, but it’s likely going to be a flat-rate charge of about $30 for flights of six hours or more, and less on shorter trips. Users will sign up with a credit card. Boeing itself will collect the fees directly from them and share the revenue with airlines.
That will make Connexion the only major Boeing business unit doing business with airline passengers themselves, not airlines, Deal said.
"We are trying to approach the customer base," he said. "This really is a transformation."
Reporter Bryan Corliss:
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