Quote :

""Over the last six years, we have invested substantial time, resources and technology in Connexion by Boeing," said Boeing Chairman, President and CEO Jim McNerney. "Regrettably, the market for this service has not materialized as had been expected. We believe this decision best balances the long-term interests of all parties with a stake in Connexion by Boeing.""

I'm not sure how many people were familiar with this service, but the Boeing Company ran a service known as Boeing ConneXion that provided WiFi service aboard aircraft. Unfortunately, the service has been hemorraging money, and after burning over a billion dollars on the service and being unable to find a buyer, the company finally called it quits.

It was a really slick technology: WiFi was brought into aircraft from orbiting satellites by a sophisticated phased-array antenna, bringing in a bandwidth that matched, if not exceeded terrestrial T3 lines. The bandwidth not only allowed for Internet access but also additional services like streaming television and digital phones. The system was available not only on Boeing but Airbus aircraft as well. True, there were competitors from groups that were utilizing ground-based transmitters, but nothing could rival the global coverage that the system provided.

The pricing was a touch bit high, running between $20-$30 for the entire flight or an hourly rate of $10. I imagine though that airlines simply couldn't afford to sell it any cheaper. Besides, when one thinks about a fourteen to twenty hour flight, $20-$30 for unlimited Internet access doesn't seem so bad, especially since many international aircraft are now equipped with power adapters in the seats. My guess is that the target audience was the business community who would have little qualms about letting employees spend twenty bucks to be productive and stay in contact.

While disappointed, I'm not suprised that the venture failed. Most of the domestic airlines that were a part of the initial effort withdrew following the collapse of the air market following 9/11. There were only a handful of European and Asian airlines that used the service, and despite the rave reviews by those who did utilize it, there were only small numbers of people who would take advantage of it each flight.

I can't blame Boeing either for not being able to bring more airlines aboard. With high fuel prices crushing the industry, the idea of additional weight from the required phased array antennas at $500,000 a plane is less than attractive. This is particularly true for the cash-strapped domestic airlines, who unfortunately were the barrier between Boeing and the most lucrative market for this product, the domestic business traveller. The company fought hard to keep the program alive, even pitching it to sea-faring vessels and the military. Yet in the end, it simply wasn't enough.

So say good bye to Boeing ConneXion, a service that came out at the wrong time (right after 9/11) and condemned by poor marketing. Other services will eventually bring Internet to the airlines, but it won't be the Boeing Company.

8/17/2006 5:22:28 PM

sucks

8/17/2006 5:29:56 PM

They couldn't compete pricewise with the terrestrial services

8/17/2006 5:34:21 PM

^ Depends. If you straight up compare them to your local WiFi hotspot then yes, they can't be compared (but then again, your local coffee shop doesn't have to worry about maintaining datastream 30,000 feet in the air over the Pacific Ocean at hundreds of miles per hour). However, there's no real alternative to Connexion at this time; the only possible alternative, the OnAir service in partnership with Airbus, isn't going to come out until late next year.

8/17/2006 6:25:19 PM

I wasn't talking about local wifi spots, I thought the terrestrial based services were in development

8/17/2006 6:49:16 PM

Luxury like this is wasted on the domestic air market.

I don't know who boeing marketed too, but I would think that the only customers for this would be Swiss Air, JAL and Singapore Airlines.

8/17/2006 7:50:00 PM

i bet emirates airlines would hop on this

8/17/2006 8:52:04 PM

I use(d) it on Lufthansa all the time, but sadly no more.

8/18/2006 5:38:02 AM

^^^ Not really a luxury if you consider the number of domestic business travelers and the number of productivity hours lost as they fly back and forth across the country. Many business travelers want to get stuff done while they're in the air, and companies want to squeeze out as much productivity as possible given the expense of travel.

Yeah, most of the users were groups like JAL and Lufthansa. Apparently they had several major ocean transports, oil rigs, and even Air Force One signed up as well.

Quote :

"I thought the terrestrial based services were in development"

Ah, okay. Those are still up in the air. The bandwidth was auctioned off, but the approach they were talking about was combining that with a satellite solution. They hadn't actually released a product yet, so it would be hard to make a true side-by-side cost and quality comparison. Still, it's a shame since now there will be only one real player left in the market.

8/18/2006 11:23:46 AM

Some more articles for those following this.

http://www.forbes.com/facesinthenews/2006/08/20/mcnerney-boeing-connexion-cx_cn_0818autofacescan01.html

Quote :

"London - As embarrassments go, it was a small one for Boeing (nyse: BA - news - people ) Chairman W. James McNerney Jr., as much a blow to pride as profit: the aircraft maker has decided to discontinue its in-flight broadband communication service, known by the designer moniker Connexion by Boeing. McNerney is probably wise to stanch the hemorrhage sooner rather than later--the service will be discontinued at a one-time cost to the company of $320 million, after the plane manufacturer invested millions in the satellite Internet connection. Boeing said it will take a pretax charge of about $290 million in the third quarter and the balance in the fourth quarter. The company said the total charges, which relate to writing down assets and payments of termination fees, amount to about 26 cents a share. "Over the last six years, we have invested substantial time, resources and technology in Connexion by Boeing," said McNerney. "Regrettably, the market for this service has not materialized as had been expected," he added. So why didn't this turkey fly? Industry consultant Doug McVitie of Arran Aerospace thought it was a combination of timing, pricing and climate. "It's a complicated issue since in-flight entertainment is usually aimed at the economy market. Boeing misjudged the potential development in the market. They thought that Connexion would help keep businessmen in contact, when in fact the service may have been the opposite of what people want. When the doors close on the airplane, there's normally a sigh of relief--people want to be unreachable." McVitie said that it was nearly impossible to make a profit on the service with such low interest among premium passengers. "Boeing needed the number of airlines to go up for the price to go down." Airport authorities imposing a temporary ban on carry-on electronics in the wake of may have been the straw that broke the camel's back, added McVitie. The Web site for the service currently states that only 11 airlines offer it--9 of which are Asian. Prices started at $9.95 per hour, or $26.95 for an entire flight. Organizing Internet access at 30,000 feet is a fussy affair. There are minimum software requirements, and you also need a wireless card. Travelers then have to configure the wireless card, create a wireless profile, sign up and then sign in. To securely connect to a corporate network, a passenger may be required to establish a virtual private network connection via the Internet, which means that software must be installed and configured successfully on the computer prior to travel. There is also the issue of laptop power. On some airlines, all seats are equipped with power outlets while others only provide juice to some seats. Boeing encouraged passengers who wanted to use the Internet to bring an extra, fully-charged laptop battery for each flight, not the best approach these days. One more problem--coverage. The service was available on all major routes in the northern hemisphere, including the North Atlantic, Europe, the Middle East and Asia. Yet coverage was not available over some regions of the southern hemisphere. "This may come again, though I doubt it," said McVitie. He augured that very basic online services--not requiring passengers to bring their own laptops--could be successful one day, though "this looks years away". A sadder story is the fate of Connexion, which employs about 560 people. Boeing said in June that it would sell or shut down Connexion in June. "But nobody bought it. And it has zero value now," said McVitie. The majority of Connexion workers are expected to find other positions within Boeing, but some layoffs are possible, a Boeing spokesman admitted Thursday."

8/21/2006 12:51:05 PM

http://www.geekzone.co.nz/content.asp?ContentId=6566

Quote :

"ASI Entertainment, Inc's. wholly owned subsidiary, ASiQ Pty Ltd, is seeing more opportunities for ASiQ's low cost alternative to the Connexion by Boeing Internet Service, which is now being officialy phased out. Ron Chapman, ASiQ's President, stated, "Connexion were too far ahead of their time. There is no comparison with the technology available today to what they launched with back in 2000. Today's aircraft satellite systems weigh less than 60Kg compared to Connexion's reported 350Kg and are a fraction of the cost. Under the Connexion scheme, airlines were reportedly paying $500,000 as an activation fee. The new ASiQ package comprises an Inmarsat broadband link, with WIFI access and is compatible with the aircraft's existing onboard network. ASiQ is offering airlines a new Internet platform over a 5 years lease from as little as $15 per flight. For narrow body aircraft the lease could be as low $5.00 per flight. This, combined with ASiQ's low access fees and Freemailconnection, will make the system even more attractive to airlines. The key to in-flight connectivity is an affordable service and this is where we believe ASiQ has an advantage. By being independent ASiQ is not locked to any specific aircraft manufacturer, hardware or service provider. As a result, ASiQ is able to secure the most competitive solutions." The hardware platform is scheduled to be available in 2007 to coincide with the launch of the broadband service and will be on display at the upcoming World Airlines Entertainment Association conference and exhibition to be held in Miami from 12 to 15 of September."

8/21/2006 2:25:53 PM