3 airlines to drop Boeing's Connexion service

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By Laura Rohde
IDG News Service

(IDG) -- A project by The Boeing Co. to put high-speed Internet connections in its planes looks unlikely to take off on time because three airline partners in the joint venture are pulling out of the project, the company said today.

Boeing's three primary partners in Connexion by Boeing have withdrawn their financial support in light of severe financial losses following the Sept. 11 terrorist attacks in the U.S., said Charlie Miller, Boeing's U.K.-based spokesman.

The partners are AMR Corp.'s American Airlines Inc., Delta Air Lines Inc. and UAL Corp.'s United Airlines Inc. But Miller stressed that though the joint venture in Connexion has been ended, Connexion itself will remain in operation, though its launch plans have been pushed back.

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"The joint venture is now suspended. However, Connexion is to continue, and we will work together with our former partners to define and refine Connexion services in the future," Miller said.

Announced in June (see story), Connexion was to be installed in up to 1,500 airliners beginning in mid-2002. It is slated to deliver two-way broadband e-mail, Internet, corporate intranet, live television and other entertainment services via satellites.

Plans call for Connexion to provide passengers with Internet connection speeds of at least 56K bit/sec. at a cost of $10 to $20 per hour.

Delta decided last month to re-evaluate its involvement with Connexion due to the cost (see story). The service required the airlines to retrofit their aircraft with Ethernet-type wiring and phased-array antennas to connect to a high-speed satellite service. Such extra costs have since become a luxury for the cash-strapped airline industry, Delta said at the time.

Andy McDill, a spokesman for Delta Technologies, a subsidiary of the airline, said today that the airline's decision is temporary.

"We are suspending it for the moment," McDill said. He gave no indication when Delta might resume funding Connexion's development.

"It's a financial and resource issue at this point. We still believe [in high-speed Internet access on board aircraft]," he said. "We just need to focus on our core business. Later on, we do hope to revisit this type of venture."

A real-time Internet connection between aircraft and ground control remains a possible security measure, but McDill said Delta didn't consider that when deciding to pull its support from Connexion.

"None of that actually came into play," he said. "Delta certainly wants to be at the forefront" in the use of technology to support security measures. "Whatever support technology can provide to aviation security, you likely will see Delta being very much involved with regards to what the government is doing."

German airline Lufthansa AG today said its plans for Connexion remain unchanged. In June, it became the fourth airline -- and the first outside the U.S. -- to say it would offer Boeing's planned service in its aircraft.

"We will stay involved [with Connexion]. As the plans have been, we are sticking to those," a spokeswoman for Lufthansa said.

Boeing said Lufthansa is the company's only active partner on the project.

"Lufthansa is currently the only airline we are working with on Connexion, and the plan is to have the pilot program up and running with them by late 2002 or early 2003," Miller said. "And though Lufthansa is the only commercial airline we are currently working with, we are also working with other operators, including some governments, as the services we are working on would be applicable elsewhere."

Computerworld's Jennifer DiSabatino contributed to this report.