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Boeing, Intel Pushing In-flight Internet

Boeing is gearing up to roll out its Connexion in-flight Internet access service in the sky.

Connexion is Boeing's wireless subsidiary and the venture has been testing its airline-based Internet service with Lufthansa German Airlines earlier this year, and British Airways will begin officially offering the service starting on February 18th. Connexion has signed deals with Japan Airlines and Scandinavian Airlines System to begin service in 2004.

Boeing has plans to install servers, access points and antennas in as many as 4,000 of its airliners in the next few years. Boeing expects to have 150 aircraft retrofitted in 2003, with another 800 planes to be Internet-ready in 2004. Future Boeing planes are expected to have this equipment, as part of assembly line construction.

Boeing is working closely with Intel in building new wireless technology into devices, networks and communication ports. There are plans for Wi-Fi, or 802.11b, wireless connection ports at airports. On Thursday, Intel announced it will launch its chip for the next generation of notebook computers with built-in wireless network connections on March 12th. The wireless technology is called Centrino, and connects new wireless chips with mobile communications networks. Boeing is a partner in the new Intel wireless technology solution. The new chip that is part of the Centrino bundle is called Banias.

Boeing has done some market research and it expects that approximately 20 percent of passengers with pay for the service, which will cost between $25 and $35 on a transcontinental flight, and less on domestic U.S. flights. There will be a revenue split of that fee between Connexion and the participating airline.

Boeing created Connexion back in November 2000 and initially the venture was financially backed by American Airlines , Delta Air Lines and United Airlines . But as these and other U.S. airlines, have fallen on hard financial times after September 11, 2001, these companies divested their investments in Connexion. Thus, while shouldering the bulk of the development costs, Boeing is now positioned to capitalize, if there is sufficient air traveller demand for in-flight Internet services.