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Boeing Disconnects Connexion

You might say Boeing was a bit optimistic in 2001 when it launched Connexion, its in-flight Internet access program called Connexion.

Back then the company predicted the market for in-flight connectivity could grow to $45 billion a year in the next decade.

To quote Homer Simpson, doh!

Five years later, Boeing  announced it is abandoning the Connexion service due to a lack of interest. Only 12 airlines, mostly Asian and European long-haul carriers, had signed up.

"Over the last six years, we have invested substantial time, resources and technology in Connexion by Boeing," said Boeing CEO Jim McNerney in a statement. "Regrettably, the market for this service has not materialized as had been expected."

Boeing had said in June that it was reviewing the future of the service. The company expects that most of the 560 people in Connexion will be transferred to other jobs within Boeing.

Boeing will take a $320 million charge to end the service, most of that coming in the third quarter. Boeing spokesperson John Dern said the company is working with the airlines that offer Connexion to wind down the service, which will end in the next few months.

Connexion competed against several in-flight Internet access services, such as OnAir, Tenzing, Airshow and Netvigator Inflight.

Tim Bajarin, president of Creative Strategies, said it came down to a return on investment.

"There's no question that there's a lot of interest in being able to connect on a plane, but it's a pretty expensive proposition from the perspective of adding it to a plane, especially older planes," he said.

Connexion charged a flat fee of $26.95 for long-haul flights or $9.95 per hour. Such a service makes sense on a 15-hour flight, but for a domestic carrier, where flights average two to three hours, there was less compelling of an argument to be had.

"The question was how many people would do it on short flights and how much they would spend," said Bajarin.