Boeing Set to Launch Airborne Internet Service

Baldwin Louie — Tue, 12 Jun 2001 15:00:00 -0700

SEATTLE (Reuters) - Aerospace giant Boeing (BA) Co. (BA.N) on Wednesday will announce deals between its airborne Internet service Connexion and three top airlines to launch high-speed in-flight Web surfing in the United States.

Seattle-based Boeing on Tuesday scheduled a press conference in Washington, D.C., on Wednesday at 9:30 a.m. EDT with Connexion President Scott Carson and airline officials.

On Monday the Wall Street Journal reported that the three largest U.S. carriers, AMR (AMR) Corp. (AMR.N) unit American Airlines, UAL (UAL) Corp. (UAL.N) unit United Airlines and Delta Air Lines (DAL) Inc. (DAL.N) were set to start limited in-service testing with Connexion.

The newspaper cited unnamed industry sources.

Connexion would allow airline passengers to surf the Web and send e-mail using satellites to transmit data between the air and the ground.

Boeing sees the in-flight Internet market growing to $45 billion a year in the next decade and hopes to grab a 10-percent share, or $4.5 billion in annual revenues.

In addition to the U.S. deals cited, which could let Boeing wire up to 1,500 or so aircraft, Boeing is also close to a deal with German flag carrier Deutsche Lufthansa AG (DLAKY) (LHAG.F), the newspaper reported. Continental (CTTAY) Airlines Inc. (CAL.N) has also been in extensive discussions on Connexion, according to unidentified officials cited in the report.

Connexion rival Tenzing Communications Inc., which offers cheaper-to-install, more modest technology, has several international customers putting the service on a portion of their fleets.

Seattle-based Tenzing has so far signed up Singapore Airlines (SIAL) (SIAL.SI), Britain's Virgin Atlantic Airways (dossier) VA.UL, and Hong Kong's Cathay Pacific Airways (dossier) (0293.HK).

In addition, Boeing's rival commercial jet maker, Europe's Airbus Industrie (dossier) (ARBU.UL), is reportedly set to announce a stake in Tenzing, extending its competition with Boeing to in-flight Internet.

Airbus is owned by European Aeronautic Defense and Space Co. (EADS) (EAD.DE) (EAD.PA), which holds an 80 percent stake, and Britain's BAE Systems Plc (BA.L).

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Boeing Set to Launch Airborne Internet Service