Boeing Fails To Sell In-Flight Internet Service - InformationWeek

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8/18/2006
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Boeing Fails To Sell In-Flight Internet Service

U.S. airlines aren't biting, so Boeing will disconnect the 6-year-old Connexion service.

Boeing confirmed last week it will discontinue its money-draining in-flight Internet access service, which failed to attract much interest from airlines.

The aircraft maker will phase out the 6-year-old Connexion service, carried by a handful of international airlines, despite substantial investments in time, resources, and technology, said Boeing CEO James McNerney.

The company will take a pretax charge of up to $320 million in the second half. The announcement of the shutdown comes nearly two months after McNerney said Boeing would consider selling the service, which reportedly has cost the company as much as $1 billion.

Cheaper technologies that let airliners tap into cellular networks may be partly to blame for Connexion's failure. OnAir, a partnership of Boeing rival Airbus and air transport infrastructure provider SITA that offers a mobile phone service in Europe, plans to roll out an E-mail service next year and data services in 2008. While Asia could be next, "the U.S. is not a key focus at this time," an OnAir spokesman says.

JetBlue Airways, which is based in New York, this year paid $7 million in a U.S. government auction for wireless licenses that could be used for online Internet access. JetBlue hasn't revealed its plans. "Wireless on board is a possibility," a spokesman says.

Boeing had hoped to sign up U.S. airlines as partners in operating Connexion, yet those relationships never materialized. Some airlines showed interest in Connexion, but their financial problems in the travel slump following the 2001 terrorist attacks may have reined them in. As a result, Internet access for U.S. travelers isn't likely to materialize anytime soon.

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