Boeing Reportedly Eyeing Sale Or Closure Of Connexion Venture
Boeing reportedly eyeing sale or closure of Connexion venture
Chicago - June 22, 2006
Boeing Co. is considering selling or closing down its 6-year-old
Connexion Internet venture amid a lack of demand by U.S. airlines
for the service, a published report said Thursday.
The aerospace company has contacted commercial-satellite operators
and other firms that might be interested in either buying the
business or becoming a major partner, The Wall Street Journal
reported, citing unidentified people familiar with the situation.
Boeing did not confirm or deny the report but acknowledged the
business is under review.
"We're evaluating the long-term business model for Connexion
to assess what's best for both the business and our customers,"
spokesman John Dern said. "The system's performing well,
we know we have a useful product, but we're trying to determine
how good a business we have."
He said no decision has been made concerning the unit.
Connexion enables passengers to have high-speed Internet hookups,
via satellite, in flight at a cost of $10 to $27. First announced
in April 2000, it suffered a major setback with potential U.S.
airline customers after the industry turmoil resulting from the
2001 terrorist attacks.
Several international carriers provide the service, including
Lufthansa, Japan Airlines and Singapore Airlines, but strapped
U.S. airlines have been reluctant to pay the cost of outfitting
their planes with it.
The Journal said Boeing has had detailed sale discussions with
Luxembourg's SES Global SA and made preliminary pitches to two
other satellite firms, London-based Inmarsat PLC and New York-based
Loral Space & Communications Inc., all of which declined to
The reported interest in a sale or shutdown comes just after an
auction of nationwide airwaves by the Federal Communications Commission
that could lead to cheaper in-flight broadband. Boeing did not
take part in the auction despite earlier expressing interest.