In 2001, Connexion by Boeing teamed with American Airlines, United Air Lines and Delta Air Lines to provide in-flight Internet service in 1,500 planes, or roughly 500 aircraft from each participating carrier. The initial installations of the airline Internet service were to begin in the second half of 2002. But the U.S. airline industry went into a deep slump following the Sept. 11, 2001, terror attacks. Before long, avoiding bankruptcy took priority over figuring out how to add Internet services.
Because foreign airlines were not as hard hit as their American counterparts, Scott Carson, the president of Connexion and a senior vice president at Boeing, shifted his attention to them. The move appears to be paying off. Following two tests early last year, Lufthansa said it will start using Connexion's service next month. Others plan to follow later in the year.
Connexion, a Seattle-based business unit of plane-making giant Boeing, is also working to offer new services with the Internet access, such as television, voice and gambling. And Carson isn't limiting himself to planes, as he recently told CNET News.com in an interview.
Q: Where do you now stand with customer rollouts and U.S. carriers? Most of your customers are foreign airlines.
A: Following Sept. 11, U.S. carriers had to focus on their survival as opposed to early involvement in capital projects. They've tracked what we have been doing and participated in studies, but we have yet to sign one of them. We have seen a heightened level of interest on their part as they see what we are doing with international airlines, many of whom are their alliance partners.
So far, Lufthansa has been the lead airline. They are in the process of upgrading six aircraft with the equipment necessary to turn our service on, and that should be completed within a couple of weeks and on track for our launch in late April. Late in the summer we expect Singapore Airlines to launch. Even though we are not yet firmly signed with them, we're close. Then in the fall, Scandinavian Airlines System (SAS), Japan Airlines and All-Nippon Airways will enter service, and shortly after the first of the year, China Airlines.
Do you see a combination of wired and wireless connections being offered in the planes?
Initially all will be wireless. SAS will be what they call the first all-wireless operator. They have no intention of ever being anything but wireless. The other three carriers are looking to us to develop an interface with their existing entertainment systems that will allow the signals to flow to the seatback and an RJ-45 plug that you could plug into. But initially they will launch wireless.
If I could choose TV or data, data feels like a more complete offering because I can entertain myself or work on my terms.
Partially that. Partially it's the demographics of the users in Europe, particularly in southern Europe...They are maybe two years behind in terms of wireless adoption rates from the rest of the world. SAS is unique. More specifically, northern Europe is unique from the rest of Europe in that it has high wireless adoption rates for 802.11b technology. With British Airways, we were surprised to see people migrate and express the view that the migration from Concord to the 747 was because the airplane was connected. They would sacrifice a quicker transatlantic transit to be connected.
JetBlue Airways helped promote this idea of premium services on planes and it seems a lot of the industry is looking to do the same thing with music, e-mail and what not. How is that affecting your business?
To pull people back into the system, you needed to offer a quality of service that was different than what had existed previously. JetBlue gambled that people are willing to be entertained; they also give that service away. Will TV be the thing that will ultimately keep the business traveler attracted? Probably not. If I could choose TV or data, data feels like a more complete offering because I can entertain myself or work on my terms.
How is it that you can use Wi-Fi on a plane in flight and not a cell service?
Cell phones have a few characteristics that are different than 802.11b-equipped devices. The frequencies are somewhat higher. They mess the heck out of a ground network. With a cell phone, you are crossing and looking at a number of separate cells. The biggest of the regulatory hurdles is dealing with the Federal Communications Commission and demonstrating that you are not going to screw up the terrestrial cell network by using a cell phone in a plane.
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Can you explain the Boeing connection. How does that work and will your equipment eventually be included standard on Boeing planes?
Buying airplanes is much like buying a car. There is the standard airplane, and then there is the option catalog. And so our desire is to make the authorized option catalog. We believe ultimately the long-haul airplanes will carry the provisions for our system.
What are some of the new services you're looking to add?
Where do you go after television? In our case we are rolling out Internet, e-mail and we know that if that is all we ever offered, it would go stale quickly. We're looking to add re-broadcast television first. We can imagine adding a voice component beyond that. People are talking about gaming and gambling in the Asian and European markets--which could be popular, especially when packaged with vacation deals. Beyond that, it gets a little murkier, but we anticipate we will just continue to add functionalities--shopping at some point.
The satellite connection in the planes accounts for both the uplink and the downlink?
Yes, the link to the airplane from the ground is four channels at 5 megabits per second each, so that's 20 megabits per second total capacity. The length from the airplane to the ground is a 1-megabit-per-second link, and again, the actual speed you will see as the consumer depends on the number of people on the airplane and where the airplanes are operating physically in the world zone.
Can you talk about how carriers can use the service to improve in-flight maintenance and how it can improve their bottom line?
Yes, in generalities. The systems that we put on airplanes today all have significant built-in test capability and generate fault codes internal to the equipment. Today the fault code will show up in the cockpit displays for the captain and will also be relayed to the ground on a system called ACARS, which is a data transmitter. What you get is the error message on the ground. There isn't much communication between the ground and the plane to solve those errors.
But with Connexion Connect we have a 5-megabit-per-second channel reserved for these kinds of applications. You can download information and query back from the maintenance operation on the ground to do component-level fault isolation. That allows you to pull a part, pull a work instruction, schedule a mechanic, and work at the arrival gate when the airplane comes in.
So it is an efficiency?
Yes. It allows you to turn that airplane more quickly. Today you have the fault code, but when the airplane lands, you plug into what we call GateLink and then you can interact with the airplane systems. If then you need a box and the box is not in San Francisco but at Portland, it takes four hours to get the component; you had to change the airplane and put another airplane in position. These are expensive assets that are most valuable when they are actively employed making money.
There is nothing that limits you to airlines. Could trains be a possibility?
There are a lot of limitations and issues to address with trains or with trucks or cars. They run through valleys and tunnels, and it is really hard to see the geostationary satellite in a lot of valleys. They often have hydropower or electrical lines directly over the top of the car, which could break up radio signals. And there are terrestrial opportunities to address in those markets that might be cheaper than going through the satellite.