Subject: [NEXTEL-1] Scandinavian takes off with Boeing Wi-Fi

From: [email-masked]
Date: Thu, 03 Jul 2003 17:10:23 -0400

Scandinavian takes off with Boeing Wi-Fi
By Richard Shim
Staff Writer, CNET News.com
July 2, 2003, 11:49 AM PT

Scandinavian Airlines is the latest major carrier to take flight with wireless
connectivity in its aircraft, as airlines look to attract tech-savvy business
travelers.

Scandinavian Airlines System (SAS) and Boeing business unit Connexion by Boeing
announced Wednesday that SAS has signed an agreement to equip 11 of its long-haul
aircraft with wireless technology that lets passengers access Connexion's Internet
service. The installation of Wi-Fi equipment will begin in 2004 with the routes
and aircraft models to be determined. Financial terms of the agreement were not
disclosed, but the deal includes an option for expansion of the service to
additional planes.

Despite the need to upgrade airplanes, to train crews and to consider the weight
of the equipment and its impact on plane takeoffs, the biggest issue for airlines
is profitability, according to Connexion spokesman Terrance Scott. Wi-Fi's growing
popularity seems to indicate that passengers will pony up for the service.

"A passenger's willingness to pay for
the service and whether an airline
can implement it profitably are the
chief concerns," Scott said.
"However, input from our own market
research shows that, more and
more, the service is a discriminator
and a way to bring high-yield
passengers--mainly business
travelers--on board."

Wireless local area networks using
Wi-Fi technology have exploded in
popularity, with equipment
shipments reaching 19.5 million
units in 2002, up more than twofold
from the previous year, according to
research firm Gartner. What remains
unclear is how companies and
service providers expect to make money
off the service because, with the market
still relatively young, a successful and
profitable business model has not yet been found.

Connexion is still determining the price and method of payment for the service,
but it is leaning toward a price of around $30 to $35 per flight and is examining
whether air miles can be a suitable payment option.

"The Nordic region is one of the world's most IT-dense areas, and the ability to
communicate easily from the air was high on our passengers' list of priorities,"
Jens Willumsen, with SAS' Market & Product Management unit, said in a release. "We
have long understood the benefits of wireless technology, and since it is now
making progress, it was an even more natural choice."

Connexion has performed tests of its service with other airlines, such as
Lufthansa and British Airways, and plans to formally launch the service in early
2004. Lufthansa has already announced it will make the service available starting
in 2004 on its fleet of about 80 long-haul aircraft, and Japan Airlines and
British Airways have signed letters of intent to work on a service agreement with
Connexion.

http://rss.com.com/2100-1039_3-1023029.html?type=pt&part=rss&tag=feed&subj=news

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