by Douglas Graham

The airline and satellite industries have seen better days. Revenues are down, anxieties are up and the immediate future does not auger particularly well. Both industries need a boost. The good news is that Boeing may have just provided it.

Recently, the company announced plans to equip airliners with broadband Internet service. Passengers will have instantaneous access to the Worldwide Web, e-mail and even TV programming from their laptops at a cost comparable to that of airborne telephony. Offered from Connexion by Boeing, the service operates on Ku-band transponders via satellite. The "Internet in the Sky" could mean big bucks to satellite providers, says Boeing Director of Operational Services Joe Shaheen. The satellite infrastructure over which it will operate is already waiting to be tapped, he adds. The additional usage will generate more revenues for the satellite industry, and those extra dollars will be earned without having to build or launch a single platform.

"Connexion by Boeing is currently under trial by British Airways and Lufthansa," Shaheen continues. "Right now we have coverage for all the United States, Europe and the North Atlantic. After the trials, we will restart the North American coverage along with the Europe-to-Asia route. This will be our main thrust for 2004, and as we move into 2005 we’ll light up other areas as well. The obvious benefit to satellite providers is that since the satellites are up there anyway, any additional revenue they generate will be gravy for the industry.

"The basic business offering of Connexion by Boeing does not include putting up our own constellation of satellites," he continues. "There are a variety of satellite providers out there already. We will pick the one that will give us the best footprints since each satellite only covers a specific geographical region. The airlines will earn payback too, first from the additional passenger traffic the service will attract, and secondly from a service perspective. Broadband will provide the airlines with a powerful service advantage. With it, an airliner will be able to forward real-time data to the ground crew when maintenance or support issues surface."

The Tests: According to Shaheen, the Internet has become a business utility as vital to commerce as the telephone. Business executives can no longer afford the luxury of temporary disconnection, he says, even at 39,000 feet. For the sake of getting a leg up on the competition, they need to touch base with colleagues at the home office, and regularly access the storehouse of information the Internet provides. Leisure travelers want connectivity too, if only to watch a good flick as they make their journey. That was the rationale behind Connexion by Boeing, but will this promising premise pan out in reality? Although the jury is still out on that, the test results so far have been promising.

"Our three month trial ended on May 15," says British Airways Spokesperson Sara John. "We charged our passengers between $20 and $30 per flight to use the service, and we exceeded the number of users we expected to reach. We deployed the technology in First Class, World Traveler Plus and Premium Economy, and when customers have used the service it has worked very well. Business travelers tend to favor Connexion by Boeing over leisure passengers because they tend to bring their laptops with them. While we really don’t know at this point the extent to which the service will increase our revenues, it was well-received by passengers."

The Competition: Seattle-based Tenzing Communications Inc. is also an in-flight connectivity provider, although its amenity package is restricted to e-mail and Short Messaging Service (SMS). The company was the first to deploy a certified, FAA-approved in-flight e-mail system, according to Director of Market Research Eric Frederickson. It was also first to demonstrate a prototype airborne broadband system, he adds.

"When we demonstrated a Ku- broadband system a few years ago the technology turned out to be economically infeasible, and not yet proven," Frederickson says. "Right now our system is set up for e-mail only, which is what passengers want anyway. Boeing is offering the whole Internet package via a very large and expensive phased-array antenna. The total weight of their system is around 500 kg. Ours uses the aircraft’s existing antenna, and whatever online server is already there, the in-flight entertainment system, for example. It’s a low-priced, full-featured e-mail system, and it’s about the size of a shoebox."

Tenzing is currently working with Cathay Pacific, and at the moment about half of the Chinese airline’s fleet of roughly 80 planes is equipped with the company’s e-mail and SMS system. The company has recently beefed up its Internet offering via a partnership with Verizon Communications Inc. Verizon has a product called JetConnect, which allows passengers to surf a frequently updated cache of Web pages containing news, sports and weather. With the addition of JetConnect, Tenzing’s e-mail service becomes a virtual Internet.

"We offer an inexpensive, high-quality e-mail system that utilizes the plane’s facilities," Frederickson says. "That’s a good deal for everybody, but when you factor in JetConnect it becomes an even better one."

Will the additional revenues generated by Internet be enough to keep the airline and satellite industries airborne? Internet probably won’t do it alone, but it won’t chase customers away either.

Douglas Graham is a contributing writer to Via Satellite.