Wednesday, August 16, 2006

Boeing to Discontinue In-Flight Broadband Business

Boeing has decided to exit the in-flight broadband market and will shut down its "Connexion by Boeing" service in the coming months. The company will take a pre-tax charge of up to $320 million, or $0.26 per share, in the second half of 2006, for write downs of the network assets, payments of early termination fees to airlines, and other costs related to shutting down the service.

"Over the last six years, we have invested substantial time, resources and technology in Connexion by Boeing," said Boeing Chairman, President and CEO Jim McNerney. "Regrettably, the market for this service has not materialized as had been expected. We believe this decision best balances the long-term interests of all parties with a stake in Connexion by Boeing."

  • Airlines currently offering "Connexion by Boeing" on long-haul flights include Air China, China Airlines, Japan Airlines, Scandinavian Airlines, ANA, El Al, Korean Air, Singapore Airlines, Asiana, Etihad and Lufthansa.

  • In January 2006, Connexion by Boeing announced a new pricing structure for its in-flight, Internet service. Internet Time -- 1 hour US$9.95; 2 hours for US$14.95; 3 hours for US$17.95; and 24 hours for US$26.95 including connecting flights.

  • Boeing first unveiled its In-flight broadband service in April 2000 and received an FCC license in 2001

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