Conquering the skies AND SEAS

Connexion by Boeing to bring broadband to ships

BY JACK ARENDS

Thanks to Connexion by Boeing, April's going to be a big month for those aboard select commercial airliners. The Boeing business unit is working on doing the same thing for ship passengers.

In April, Connexion by Boeing will begin its satellite-powered broadband connectivity for commercial airliners in an initial coverage area that will stretch eastward across the Atlantic Ocean, through Europe and Asia. Passengers on Connexion-equipped aircraft will be able to send and receive e-mail with attachments and surf the Web in real time, while airlines will be able to use the same system to transmit flight and maintenance data to and from the ground with similar ease.

In January 2004, Connexion leadership announced a second act every bit as exciting: The Boeing business unit plans to offer its service to the world's maritime vessels. Vessels currently relying on expensive, narrowband communications systems will have the choice to upgrade to low-cost, broadband connectivity.

This move illustrates how a Boeing business unit is growing by following a classic "next-square" approach: Expand its customer base by taking a technology the company understands extremely well into an adjacent market.

"Vessels need to stay connected, no matter where they are in the world-close to shore or in the shipping lanes across the Pacific and other oceanic regions," said Connexion by Boeing President Scott Carson. The available maritime market could include as many as 35,000 ships worldwide, he added.

After receiving authorization in September 2003 from the U.S. Federal Communications Commission, Connexion by Boeing engineers-working with colleagues from Phantom Works, Integrated Defense Systems and Commercial Airplanes-successfully conducted several tests of maritime connectivity last fall. They used a private yacht, equipped with a mechanical antenna covered by a radome, to send and receive e-mail via the Internet and Boeing intranet, and to view sites on the World Wide Web.

The move into the maritime market also shows how Connexion by Boeing reacted to a change in the market and seized upon an opportunity.

Before Sept. 11, 2001, Connexion had agreed with American, Delta, and United airlines to introduce the service above the continental United States, where half the world's commercial flights took place every day. With three airlines as equity partners, and the service in place aboard 1,500 of their aircraft, Connexion leadership projected that the satellite transponders the business unit had leased would see plenty of activity.

With U.S.-based carriers' ambitions thwarted for the short term by the falloff in traffic after the terrorist attacks on New York and Washington, Connexion shifted its focus to an international launch. The business unit conducted successful trial demonstrations with Lufthansa German Airlines and British Airways, expanded its executive jet service to smaller aircraft through a joint venture with Rockwell Collins (called Collins eXchange), and found international customers. Scandinavian Airlines Systems, Japan Airlines and All Nippon Airways have joined Lufthansa in signing definitive service agreements. Singapore Airlines, Taiwan's China Airlines and Kingdom Holding Co. of Saudi Arabia have signed preliminary agreements.

These agreements, however, still involve fewer aircraft being served over longer routes than would have been the case in a U.S. domestic service launch. After considerable market research and discussions with potential customers, Connexion by Boeing leadership in January 2004 expanded the customer base to maritime vessels. That decision creates a market for the excess transponder capacity Connexion would be paying for anyway, and broadens the business unit's potential revenue base.

"Testing we did last fall helped us determine the value our global network can bring to travelers at sea, as well as the operational benefits we can bring to the maritime industry," Carson said. "Our service can be of use to people aboard cruise ships, freighters or military vessels."

jack.h.arends@boeing.com