In-Flight Internet Coming Soon?
June 6 -- International air travelers on a few select airlines will be able to surf the Web at 35,000 feet from next year, but questions remain over how eager passengers and carriers will be to pay for sky-high e-mail.
Commercial aircraft giant Boeing Co. expects to announce its first customers for its “Connexion by Boeing” service at the Paris air show later this month.
Tenzing Communications Inc., which offers a cheaper-to-install, more modest technology, already has several customers putting the service on a portion of their fleets.
Tenzing could also name more customers in Paris and Boeing arch-rival Airbus is reportedly set to take a stake in Tenzing as part of a strategy to extend its competition with Boeing to in-flight Internet.
Boeing has projected that the market for in-flight Internet services will reach $45 billion by the end of the decade, with a tenth of that going to Boeing’s Connexion service.
But the first couple of years could be much less lucrative, and airlines are said to be concerned about how revenue will be split with their service provider.
Revenues could initially be “quite small,” said Nikolas Herrmann, a consultant at Roland Berger Strategy Consultants, who has worked with major airlines on other e-commerce offerings.
“I would think it’s not necessarily the income-generator for the airline that some of the service providers would try to make them believe,” he said.
He pointed to in-flight phones, which because of their high rates have drawn only modest interest from passengers since airlines began installing them in seat backs.
Providers maintain that the services will be reasonably priced, with Tenzing saying its service could break down to about 50 U.S. cents an e-mail.
U.S. Airline Interest Tentative
So far, Tenzing’s customers are non-U.S. airlines such as Singapore Airlines, Britain’s Virgin Atlantic Airways and Hong Kong’s Cathay Pacific Airways.
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