Boeing Planning to Offer In-Flight Internet Services
In the not-too-distant future, you’ll be able read or send an e-mail, surf the Web, watch real-time news or communicate with the home office at 40,000 feet.
In commercial air travel today, passengers can’t do that. But aircraft giant Boeing Co. and some smaller technology companies hope to make Internet and entertainment services available to air travelers by late next year.
The services will be delivered by a high-tech system of satellites, computer servers and specialized airplane antennas that will transmit Internet data to laptop-toting passengers and will be available to all jet travelers, beginning with U.S. domestic flights, officials say.
Demand for a mobile Internet connection has been high because commercial airlines are looking for ways to expand in-flight services, boost revenue and improve the flying experience, experts say. But until recently, the technology to make the Internet workable in jet aircraft has been too expensive, too cumbersome or nonexistent.
Boeing is attempting to combine the best of the “old” and “new” economies within its own vast operations to pioneer a breakthrough in mobile communications.
“Trying to make the time on the airplane more productive is really a tremendous feature that will dramatically change the way people travel,” said Ken Medlin, Boeing’s vice president of commercial information systems in Seal Beach.
The airplane will become an extension of a business traveler’s office or an extension of an economy passenger’s virtual home. In each case, they could stay in contact with colleagues, friends or family while flying the friendly skies. The Internet’s vast resources would be available to search for corporate information or to find a funky restaurant. Live news and sporting broadcasts could be available, rather than the pre-produced programs airlines show today.
For Boeing, the epitome of an old-economy manufacturing company, offering Internet services is part of its effort to further boost a resurgent stock and compete in the new economy by expanding into various aerospace-related services.
Connexion by Boeing, as it is called, represents one of several initiatives aimed at grabbing a big share of these lucrative markets. Boeing forecasts sales of $2.6 trillion for aviation services over the next 20 years, nearly double the $1.5-trillion market for new airplanes. The airborne communications market alone could generate more than $50 billion in revenue over the next decade, officials say.
Boeing plans to roll out its high-speed Internet service late next year for U.S. domestic flights. So far, Boeing is talking to about 20 domestic and foreign airlines.
This is how the service will work: Upon entering the jetliner, a passenger will hook up his or her laptop to the airplane seat. Connexion will identify the type of computer and operating system and then download system software.
Once the connection is made, a passenger can view a menu that offers Internet services, news and information, live television, company intranets, carrier information, online shopping and destination information that could help them make dinner or hotel reservations. Chat rooms and instant messaging also will be available.
Boeing is negotiating with various cable channels such as CNN, ESPN, Eurosport and Euronews to fill the four television channels that will be available on the system.
Passengers will pay for the system with their credit card or through a corporate account, Medlin said. But the charges won’t be cheap, beginning at about $17.50 an hour, nearly as much as what America Online charges for unlimited Internet access for an entire month.
Connexion will have significant bandwidth, able to receive information at 5 megabits per second. Data can be sent from the plane at 1.5 mps, or about as fast as a T-1 line. The open computing platform will run Microsoft’s Windows 2000 and Linux operating systems.
Boeing’s system is based on a phased array antenna that engineers had developed in 1986. Many corporate jets, which spare no expense, have been outfitted with the same antenna that will be used on commercial jetliners.
The phased array antenna locks on a satellite by steering its signals electronically, Medlin said. The information is then transmitted to computer servers on the airplane that distribute the data to the customer’s laptop. Competing systems, by contrast, will use antennas that move mechanically. Medlin declined to disclose the cost of the new program or how much Boeing plans to charge airlines for the system.
The Seattle-based aerospace company announced the Internet services venture in April, joining units of Loral Space & Communications, Japan’s Mitsubishi group and Italy’s Finmeccanica to create an in-flight communications venture.
Boeing will tap into Loral’s system, which has 10 satellites blanketing North and South America, Europe and parts of Asia. The Japanese and Italians will provide management and technical expertise for the system in Europe and Asia.
At the Farnborough Air Show in Britain in July, Boeing signed a deal with Eurosport--the ESPN of Europe--to provide live, multilingual sports programming for its in-flight Internet service.
Boeing is not the only company that sees a lucrative opportunity. At least five others are marketing their satellite-based communications systems to airlines.
Some are hoping that they can beat Boeing to the market with less sophisticated systems but ones that tap into the existing air-to-ground phones found on many airlines.
Key competitors include a Fort Lauderdale, Fla.-based company called Inflightonline.com and Primex Technologies of St. Petersburg, Fla.
Globalstar Telecommunications and San Diego wireless giant Qualcomm joined a venture headed by Rupert Murdoch’s News Corp. to offer in-flight e-mail and Internet connection services.
Inflightonline.com appears close to landing some contracts with airlines, company executives say. Its system offers Internet and e-mail services through the current air-to-ground phone systems. The bandwidth--the volume of information that flows through the communication pipe--is much smaller than what Boeing proposes.
But Inflightonline President Dave Brunner said his company’s advantage is that it can install a mobile communications system in airplanes today using existing technology.
The company is starting with just Internet and e-mail services, but it could include broadband in the future and offer expanded live video services, Brunner said.
“When new technology comes on line, our system will improve,” Brunner said. “But we must make it economical--that’s where we have an advantage.” Compared with the average cost of $13 for one air-to-ground phone call, Inflightonline’s basic e-mail package begins at $4.95 per flight. The cost nearly doubles if the customer wants to surf the Net and send and retrieve e-mail.
Boeing investors, frustrated by the company’s costly airplane production mistakes three years ago that had sent the stock plummeting, appear to be encouraged by the move into the services business.
Boeing shares have climbed 26% in the last six months, reflecting the outlook for commercial jets and continued efforts to cut costs as well as create business opportunities. The stock closed Friday at $54.13 on the New York Stock Exchange, up 50 cents.
“Boeing is talking about doubling its revenues in five years, but it can’t do that with its current businesses,” said Paul Nisbet, an aerospace analyst for JSA Research. “What they are doing is branching out into these aftermarkets and expanding into the services business. That’s about the only place where they have the ability to grow.”
