Boeing Unveils Three Connexion Partners

Boeing Co. on Wednesday said it has partnered with the three largest U.S. carriers — AMR
Corp.’s American Airlines, UAL Corp.’s United Airlines and Delta Airlines
Inc. — to provide millions of worldwide airline passengers each year with two-way broadband connectivity to e-mail, the Internet, and other in-flight services using Boeing’s airborne ISP known as Connexion.

The company detailed the alliances at a 9:30 a.m. press conference in Washington, D.C. Word of the alliance has circulated since late last week.

The four companies will form a new global business venture to provide the broadband connection. In order to strike the deal with the carriers, Boeing conceded partial ownership of the proposed venture to the three airlines. But Boeing still retains majority control and overall management responsibility.

While Boeing’s Connexion service certainly has the highest profile, it is certainly not alone. Its main competition appears to be Tenzing Communications Inc., which offers a
less costly narrowband cached Internet and e-mail solution. Tenzing maintains that though its solution does not offer the broadband, real-time capabilities of Boeing’s Connexion, it remains competitive due to price issues.

Tenzing has managed to sign a number of international customers, including
Singapore Airlines, Britain’s Virgin Atlantic Airways and Hong Kong’s Cathay
Pacific Airways.

“It will take this kind of collaboration to bring a high-quality service to the airline passenger and the entire marketplace,” said Scott Carson, president, Connexion by Boeing. “Each of the airlines and Boeing bring together a critical mass to help ensure
success for this service with airline passengers and the global airline industry.”

The Connexion by Boeing service is a drive to extend home- and office-like
connectivity to airline passengers through a mobile broadband service
expected to be comparably priced with cellular phone service. Connexion will
offer passengers access to the Internet, e-mail, television news and
information in real-time. In May, Boeing struck a deal with ScreamingMedia
Inc., which will aggregate licensed content — including worldwide, national
and local news, sports and features — from more than 3,000 publications in
its digital content network and then filter, deliver and instantaneously
integrate that content in the Connexion service.
The timing of the first installation will be in the second half of 2002.

The Connexion service extends the capabilities of a Network Operations
Center (NOC) to a satellite orbiting at about 23,000 miles. Information is
uplinked from the NOC to a satellite, which then downlinks the information
to an aircraft via an antenna mounted on the fuselage. The antenna remains
in constant contact with the satellite, even when the plane is moving at 600
miles per hour. The downlinked information goes to an on-board server and
the signal is then routed to individual seats on the aircraft.

Upon signing definitive agreements, Boeing and the airlines each will contribute funding, certain intellectual property, and other assets necessary to carry on the business of the proposed venture. As part of the definitive agreements, the three airlines will equip a total of 1,500 aircraft with the venture’s innovative, high-speed broadband Internet connectivity service, which will retain the Connexion by Boeing name.

Boeing reportedly thinks the market for in-flight connectivity could grow to $45
billion a year in the next decade.

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