Boeing announces a venture with three major airlines to launch a high-speed, in-flight Web-surfing service.
The Boeing Internet unit, called Connexion by Boeing, will team with American Airlines, United Airlines and Delta Air Lines to offer its in-flight Internet service in a total of 1,500 planes, or 500 from each carrier. First installations of the airline Internet service will begin in the second half of 2002.
The service will offer e-mail as well as Internet and intranet access through a satellite link. The price will be similar to in-flight cell phone or 1-800 dial-up service and cost about $20 an hour, Connexion by Boeing President Scott Carson said in a press conference.
"It's another way of producing new revenue streams and another way of providing more services to the airlines' top customers," said airline analyst Ray Neidl of ABN AMRO.
The four companies will jointly own the service, with Boeing as the major shareholder and having the major management responsibilities. The project will keep the Connexion by Boeing name, but all the partners will contribute funding, intellectual property and other resources.
"The airlines are concerned that customers get what they want," James Beer, a vice president at American, said at a press conference, highlighting the service's appeal to business travelers.
In-flight Internet will "enhance their ability to get their work done and view air travel as an extension of their office."
Passengers will need to bring their own Internet connection device--a laptop computer, for instance--to use the service, Carson said, and the service operates at data rates of 5 mbps for incoming traffic and 1mbps for outgoing.
The speed will depend on the number of Internet users during each flight. Connexion by Boeing spokesman Terrance Scott says customers will have a minimum Internet hook-up equivalent to a 56K modem but should be able to get higher speeds.
ABN AMRO's Neidl says that in-flight phone calling has caught on among travelers, which suggests that Internet service would follow the same success. Other analysts point out that the adoption of the new service, which will replace popular in-flight activities like sleeping and reading, may not be smooth.
"So much is going to be dependent on functionality, cost (and) speed," said David Schehr, an e-commerce travel analyst at Gartner Dataquest who wonders if enough people will feel the need to be ultra-connected on domestic flights that only put them off e-mail for a few hours.
"As a human being that travels a lot, I don't know if I want to be that connected," said Schehr.
Schehr believes the service will be more attractive to global flights that stay in the air much longer. The Connexion by Boeing service will only be available at first for domestic U.S. flights.