Boeing disconnecting Connexion

Business travelers -- especially those who regularly fly long-haul international routes -- are not gonna be happy about this one: after reviewing the long-term sustainability of its in-flight Connexion broadband service and reportedly seeking buyers to take over the money-losing operation, Boeing has finally decided to simply scrap the service and exit the nascent market. Citing lack of interest in its pricey offering, company Chairman, President, and CEO Jim McNerney opined that "we believe this decision best balances the long-term interests of all parties with a stake in Connexion by Boeing;" though by "all parties," he probably wasn't including our many commenters who reportedly enjoyed the ability to web surf and get their WOW-on miles above the Earth. Although the news is obviously bad for investors (benefits from the lack of further investment in the service won't initially outweigh the additional charges the company now expects to recognize this year), at least "the majority of Connexion employees" will reportedly be able to find jobs elsewhere in the organization. It still seems pretty clear that there's some demand out there for in-flight communication options (well, not if you ask Verizon), but unfortunately for Boeing, being an early adopter in this market just didn't pan out.

[Via the::unwired]

[chaosrain @ Aug 17th 2006 4:40PM]

With the UK banning nearly all portable electronics in the passenger cabin of airplanes, and many other tech-consuming nations likely to follow suit in the near future, this idea pretty much died on 8/10. The "terrorist threat" seems to be more tied to international travel than domestic, and Connexion was tied to international routes for the most part, we probably won't get any broadband at 30,000 foot love until they devise communications gear which you could borrrow or rent from the airline that was already limited in functionality and "sanitized" to ensure that it was not a threat. That would constitute a pretty significant capital outlay beyond just the connection hardware...likely more than Boeing had in mind.

[Ryan R @ Aug 17th 2006 4:40PM]

stupid a**holes....
its quite obvious why this hasnt worked... it doesnt take an MBA to realize that if we had power in all seats we'd be more likely to pay for the service

i would buy it for every transcontinental flight im on if it were available, and there was a power supply... now they are going to disconnect all those great airlines

im angry

[Hammo @ Aug 17th 2006 5:27PM]

"With the UK banning nearly all portable electronics in the passenger cabin of airplanes"

Um, not quite. No restrictions on electronics anymore.

[Shmoe @ Aug 17th 2006 6:08PM]

This service is needed, but the dumb asses want to charge an arm and a leg. Make it more affordable and watch it grow!

[TC @ Aug 17th 2006 6:10PM]

Hammo:
But given that passengers still aren't trusted to use metal knives and forks, surely a heavy, blunt laptop could do untold damage if placed in the wrong hands? ;-)

I agree with Ryan, - more Power sockets in classes other than business and less treating me like a criminal when I turn on a CD player or PDA would probably made a difference.

[David Lazarus @ Aug 17th 2006 6:36PM]

Yes power sockets in all seat and even ethernet, which would eliminate risks of wireless radiation, would give customers a reason to book with an airline. Many take laptops even on short haul and rather than sit there bored will work on the flight. You would only need a one meter cable from laptop to seat arm will suffice. Airlines with the service could get business from those that fo not offer it and even at a premium. They may say that there is no interest, but many are waiting to see what transpires before commiting themselves.

[Robert @ Aug 17th 2006 6:37PM]

To tell you the truth it's not Boeing that messed this up for everyone that is dissapointed, it was the airlines. They have to first buy and install the systems on their jets and and offer it to a larger market before the price can come down. It's the airlines that denied the Boeing service that lack vision and ultimately condemed the system.

Think about it - if there is an average of 2 people using the service on a transcontinental flight they basically have a dedicated sattelite uplink and all of the air/ground support that goes with that factoring into their price.

[fxguy @ Aug 17th 2006 6:41PM]

Offer it to people other than those flying first class and you'd have a lot more users...
(At last as far as Luftansa goes.)

[Armand @ Aug 17th 2006 6:58PM]

The service was a great idea killed by two factors. First, extortionate pricing. Second, the continued and infuriating stupidity of the airlines and Boeing in not having power plugs at EVERY seat.

I would pay a reasonable rate on my transatlantic and transpacific flights. However, I can only be tempted to do so when my seat has a power plug. No power, means no sale. It should not require a lot of intellect to make that simple connection!

[JR @ Aug 17th 2006 7:53PM]

This is a very poor decision on Boeing's part. There are many, many business travelers that would benefit from this service. They need to look at other alternatives.

If they don't pull it off, Airbus will.

Get it together Boeing.

[Phil @ Mar 22nd 2007 12:36PM]

I worked for Connexion by Boeing during the inception phase from 2001 to 2003 and you are all wrong..What killed it was 9/11. We lost all domestic carriers which forced us into the international market way to soon. Not to mention you don't have the first clue what it takes to provide wireless live content in flight...Airbus will do it? Boeing is the leader in Airline Technology, with what is going on with-in Airbus---They can dream about it is all!

[Nick @ Aug 17th 2006 10:02PM]

It's a shame, since I used the service just 2 weeks ago on my Tokyo > Chicago flight. Being able to surf the web made the trip go by a lot faster.

I agree however, that the service is too expensive. $10 for one hour is a little steep. Why not make it cheaper to start off?

In case anyone was wondering, the service works with Palm OS, too. Even though it doesn't mention it, it worked with my LifeDrive flawlessly.

[JP @ Aug 18th 2006 11:13AM]

I flew recently on Korean Air from New York to Seoul then Shanghai. Bought the all-day Boeing Connexion for $25 - thought that was completely reasonable. And I did have power at my seat. Was able to keep up with email for the 16 hour flight.

I would absolutely pay $5/hour on shorter 2-5 hour flights to keep up with client emails, etc.

[Tomas @ Aug 18th 2006 11:17AM]

Frankly, I don't think they were charging enough for the service. It should have been $50 for the flight, not $25. The fact is that (usually) only business/first class has power, so business/first travelers are the only ones using the system. It's also a fact that most people in business/first are actually traveling on business, where this sort of thing can be expensed.

Until there's power in the whole of the aircraft, there's no point in dropping the price, because there would be no commensurate increase in the user base.

All that said, this freaking sucks, since it was a great system.

[Michael Urlocker @ Aug 18th 2006 12:49PM]

My view: Don't trust what people say; trust to what they do.

Market research said there was a big market for this service with a 44% take rate.

But user actions suggest otherwise. Notice how Verizon cancelled its Airfone service because of low usage.

If you watch people on airplanes, here is what they do:
Snooze,
Booze,
Eat,
Watch movie,
Listen to iPod,
Read.

Note the mushrooming of portable DVD player and DVD movie rental kiosks at airports.

Looking at the Boeing's service through our Disruption Scorecard, it would score two poor grades which were warning signs.

Details:
http://www.ondisruption.com/my_weblog/2006/08/boeing_pulls_pl.html

[John Robinson @ Aug 18th 2006 10:57PM]

It will be a massive loss to those who do fly regularly & are getting into the habit of using the service and even Skype'ing people on the ground.
It's a given that more inseat power is essential, but another option would have been to better integrate the service with existing inflight entertainment systems. Many airlines have quite sophisticated systems, some have even experimented with SMS using the regular wired handset. With a little forethought, it would have been comapritively easy to add a web browser with an extensive selection of bookamarks. Though cumbersome, entering a URL or even usung webmail is possible with existing controls - not elegant perhaps but certainly a good way to kill 12 hours!!

[Paul @ Aug 30th 2006 2:32AM]

It's not about an early adopter getting arrows in the back, but about not having a realistic business plan and saddling the service with an unwieldy cost structure. We've seen this kind of mistake before in Iridium, although in the case of Connexion, at least the service worked acceptably (and you don't need to carry around a brick to use it).

Bottom line to all those fans of the service: it doesn't matter how much you personally like it. Uptake by US airlines was a necessary precondition to generate volume, as were much more reasonable pricing plans. To break even, Connexion required 400x as many users as they had signed up. Faced with the prospect of at least a $200M loss in 2007, increasing competition from cheaper land-to-air technology, and uncertainty as to when, if ever, the US majors would live up to their original commitment to outfit 1,500 planes, McNerney made the only sensible business decision.

see:
http://thewaythingsare.typepad.com/antimarketer/2006/08/boeing_booboo.html

[Dave J @ Sep 8th 2006 4:41AM]

This is a total bummer. Used the service a few times on Lufthansa transatlantic flights and it was great (even listened to US radio with no problems at all). $25 for a transatlantic flight was no problem -- would've paid $35 (although not much more).

Once the hardware is in place, how expensive can it be to run???

[Joe @ Dec 31st 2006 6:26PM]

we have a patented, much cheaper solution for all wireless needs...

Our solution is to link all the commercial aircraft in the sky as flying repeaters, (or very low earth orbit satellites)to carry the bandwidth.

Exactly the concept of Internet... BCA (Broadband over Commercial Airlines) not only provide wireless services in flight but also provide services down on ground.

At 30,000 ft in the sky, BCA covers 600miles in diameter, BCA, (again not just in-flight) could provide a huge area of coverage that normall cellphone wouldn't.

Thank you all for this introduction, please comment...

Joe on behalf of BCA 310-832-4911
www.teleavionics.com

[Matt @ Aug 1st 2007 3:15PM]

You simply can't charge $500,000 to outfit one plane and expect airlines to buy it.