Subject: [NEXTEL-1] Passengers Praise Boeing's In-Flight Internet Service

From: Marcel <[email-masked]>
Date: Mon, 10 Feb 2003 18:14:08 -0500

Passengers Praise Boeing's In-Flight Internet Service

Passengers are responding positively to the Connexion by Boeing in-flight
Internet access service being offered aboard Lufthansa's service between
Frankfurt, Germany and Washington's Dulles Airport. Seats in the first class and
business class, and some in economy class are equipped with the service, as
well as a power plug. Passengers who are traveling without their laptop
computers can use one of 50 aboard. During the market test, the service is free.
Lufthansa estimates that it would eventually charge passengers $30-$35 per
flight to use the Internet service. Tenzing Communications is developing an
in-flight e-mail and short messaging service, and plans to add real-time Internet
connectivity to its product. Tenzing is backed, in part, by Boeing rival Airbus

Anticipation builds for in-flight broadband
Net access

CHICAGO (Reuters) — Travelers are cheering the
long-awaited news that real-time Internet connectivity is now
available from an airline seat — even if it is just a test on one
regularly scheduled flight. But will the airline industry's
unprecedented economic malaise imprison this development for
the time being, shelving it after scattered tests instead of making
it a commonplace service?

But will the airline industry's unprecedented economic malaise
imprison this development for the time being, shelving it after
scattered tests instead of making it a commonplace service?

Maybe not, according to some industry observers who believe the carriers still need to
lure their best
business travel customers not only with competitive prices but with service that
differentiates them and
promotes repeat trade.

"I see Internet connectivity as a way of enhancing revenue yield — it probably has a life
of its own"
despite uncertain times, says Phil Roberts of Unisys R2A Transportation Management
Consultants.

Making it available should "attract the high yield business customer. It's a market share
decision driven by
technology," he adds, and one that could be pursued even by a carrier in bankruptcy if it
can demonstrate
the investment at least pays for itself.

"Product competition has to be matched," adds Paul Biederman, a professor of airline and
travel
management at New York University's School of Professional Continuing Studies.

Because ticket prices on some routes are often pretty much the same, "the only competition
out there has
to do with product content, and if one company makes a breakthrough, the others have to
match it."

The first test of live, real-time airborne broadband Internet access on a regular
commercial flight began in
January aboard Lufthansa's daily service between Frankfurt, Germany, and Washington's
Dulles airport
— flights LH418 and LH419 — using a Boeing 747-400. Every first-class and business-class
seat is
equipped with an Internet plug-in (as well as a power plug) and scattered seats in economy
class have the
same.

For the three-month test the airline has on board 50 laptops it will hand out for anyone
not carrying their
own who wants to try the connection. The technology, under development for several years,
comes from
Connexion by Boeing. Data streams to and from the airplane in flight via satellite.

"My first thought was 'now there's another chance for not getting relaxed travel (with) no
phone or
e-mail,"' said Ulrich Hoffmann, sales director for Bericap GmbH, a German-based
manufacturer of plastic
caps and closures, who was on board the first flight where the service was offered.

But he said he figured he could always disconnect if he wanted peace.

"With new technology, when you try it the first time, very seldom it starts to work from
point zero. But this
worked immediately. It was absolutely fantastic," he told Reuters from his office near
Wiesbaden.

He said he communicated with his company's internal system and with a customer and "it
worked
perfectly." One passenger on the plane sent an e-mail to a fellow passenger "and it
arrived in four
minutes," he added.

Hoffmann said he would consider the service valuable for taking care of critical
situations that arise,
particularly during long flights that must be addressed quickly, and that he would be
willing to pay a
premium for the service. Right now, he said, it would give airlines offering it a
"competitive edge" in
attracting business.

One of the airline's executives reported that the service has been so popular that some
fliers have
eschewed their usual trans-Atlantic nap in favor of surfing the Web.

During the test the service is free, but Lufthansa says it envisions eventually charging
passengers 30 to 35
euros (about $30 to $35) per flight leg. The product is designed to make money, with the
airlines paying
Boeing an up-front fee to install the hardware and sharing some of the ensuing passenger
fees with the
aerospace giant.

The Lufthansa test will be followed by a similar one later this year on British Airways.
Japan Airlines and
Scandinavian Airline Systems have said they would deploy some long-range flights with the
technology in
2004.

Connexion officials have said they hope to ultimately install the service on some 4,000
jets — about a
third of the world's commercial fleet — over the next 10 years. How much it costs to
retrofit a plane for
the system has not been disclosed.

At one point American, United and Delta had planned to invest in Boeing's Connexion
venture, but
dropped out when bad economic times hit. Boeing has said they may still become customers
for the
service in the future.

A competing in-flight technology, from Seattle-based Tenzing Communications, has also had
some
deployment primarily for e-mail and short messages. Rather than real-time connectivity, it
operates by
sending bursts of data back and forth from the ground to the plane.

The company, in which Boeing rival Airbus owns a 30% stake, said last year that it too was
developing a
plan to add live broadband satellite connectivity to its product.

http://www.usatoday.com/tech/news/techinnovations/2003-02-07-inflight-net_x.htm

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