A different type of mile high club
Connect to the internet or read the duty free gift catalogue? Aircraft manufacturer Boeing is gearing up to answer that question for business travellers.
Connexion by Boeing, the company's wireless technology subsidiary, is in the midst of rolling out its in-flight internet service, which could lead to billions of dollars in additional annual revenue for the aircraft manufacturer. Lufthansa German Airlines began trials earlier this year on a Frankfurt-US flight. British Airways will begin to offer the service from 18 February on a London-New York (JFK) flight. Japan Airlines and Scandinavian Airlines System will begin service in 2004.
Eventually, Boeing hopes to retrofit 4,000 airplanes with servers, access points and antennas for in-flight internet access, said Scott Carson, president of Connexion. In the future, planes will emerge from the factory with the necessary internet-access equipment installed.
"We expect to sign one or more US carriers by the end of the year," he said.
One hundred and fifty planes will likely be retrofitted this year for internet service, he added, while 800 more are expected to come online in 2004. Concurrently, Intel and others will begin to build and promote Wi-Fi connection areas in airports. Wi-Fi, also known as 802.11b, is a technology that allows the creation of wireless networks with a radius of around 100 metres.
To date, companies have struggled to make money off of providing wireless internet service but Boeing enjoys an advantage competitors haven't had: a captive audience.
And boredom, Boeing executives believe, can pay. Each international-bound plane flies approximately 700 flights a year, Carson estimated. Early marketing tests show that roughly 20 per cent of passengers on large planes, or 60 to 80 people, will sign up for the service, which will cost $25 to $35 per transcontinental flight. Approximately 100 people, or nearly 30 per cent of total passengers, are trying out the service on Lufthansa in the early trials.
Multiplying these numbers, prospective revenue will come to $5bn to $8bn annually, depending on the variables plugged into the equation. Connexion will share service with participating airlines.
Internet service for flights within the US will cost less, said Carson, but planes on domestic routes can complete five or more flights a day.
The company will also charge airlines fees for installing the system.