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Home » General

Boeing Shuts Down Connexion

Posted by Chris Leckness on August 25, 2006 – 8:50 am
closeThis post was published 3 years 2 months 15 days ago which may make its actuality or expire date not be valid anymore. This site is not responsible for any misunderstanding.

Boeing can’t find a buyer for its high-speed broadband airline service and decided to shut the business down by the end of the year. About 25 customers use the service in a typical long-haul Lufthansa flight for a cost of about $26.95 per day, not enough for viability.

This decision ends the only in-flight internet service for commercial airline travelers and does not bode well for the future of in-flight entertainment. However, this service has been losing money since its inception in 2000, and airlines are finding themselves battling not only each other for customers, but a huge rise in fuel costs and additional security. Ideally, airlines would like to entice customers with extras such as wifi, movies and other revenue generating products, however, customers are using online services to find the lowest fares and becoming less loyal to carriers and more price sensitive. Additionally, these perks are not generating enough revenue to pay for themselves anyway, let alone enticing more customers to travel.



"We are disappointed because it is something that our customers have enjoyed," says Jennifer Urbaniak, a spokewoman for Lufthansa, which was Connexion’s first customer in 2004. "We’re hopeful that we will be able to find a way to continue the service in the future with another partner."

Connexion’s system costs about $500,000 or more to install on an aircraft. Major US airlines showed much interest in Connexion when it was launched but have struggled to earn profits, and couldn’t justify spending the money on the system. It would take a huge amount of customers just to break even, let alone earn a profit.

Perhaps Connexion is ahead of its time, or perhaps other factors such as unexpectedly high fuel costs and security concerns have become obstacles for such services; either way, don’t expect wifi on your next flight or very soon. In fact, if you’ve traveled recently you will have noticed that many airline services have been cut back, such as movies and meals. They now charge ridiculous amounts for snacks as well. I imagine that the soft drinks that are free today will soon cost money as well. And as evidenced by recent events, you won’t be able to bring your own drinks aboard.

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Chris Leckness is the Owner/Administrator of Mobilitysite. He is a Microsoft MVP, Mobile Devices and a member of the exclusive focus group, Mobius. Chris runs a Mobilitysite, GotZune, and a few other smaller sites and blogs. His personal blog is chris.leckness.com.





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  • It is absolutely not ahead of its time. But some very bad assumptions were made based on flawed market research and poor business planning.

    The requirement for this to be profitable based on the cost structure was almost 400x as many users. Boeing has already sunk $1B USD into a non-core business that they probably shouldn't have entered in the first place, and were on pace to lose another $200M in 2007.

    Good service or not, something's gotta give. And, the recent security issues aren't helping (if they don't lighten up on security soon, commercial air travel as a business may not be long for this earth).
  • Dave
    The problems with the service as it is now are quite obvious:

    1) Power -- Most airlines do not have power in economy, and the power in the (far fewer in number) business and first class areas often requires expensive and cumbersome adaptors. People forget their adaptors, or balk at buying one, and so even more potential users stay away. To make this sort of thing work, every seat needs a standard US-Euro plug. Period.

    2) Wrong Customers -- Sure, years ago you might have assumed that net connections are more for business users than those in economy, but that's not how it worked out. Biz travellers have their blackberries to play with before and after the flight, and are generally exhausted and more likely to be sleeping or watching their fancy TV screens. Economy is where you have the restless hordes, packed into tight seating and desperate for distraction. These days, online gaming is a huge draw and would probably outsell someone checking their corporate email on every flight.

    3) Pricing -- There are plans for as little as $10 for one hour, but it's true that the prices need to come down a little in order to get the numbers up. Or package the $27 service with the wifi in the airport waiting areas as well, so that people can use their machines from the moment they enter the airport till the moment they arrive.
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