High-speed Internet access in the sky could be on of those things that doesn't fit with the new realities facing the airline industry, which has seen a decline in passenger traffic and a sharp drop in revenues since the September 11 terrorist attacks on the U.S.
Delta Air Lines Inc. has decided to re-evaluate the installation of high-speed Internet service through Connexion by Boeing, in which it took an ownership interest this summer. Connexion, which is owned by Delta, The Boeing Co., American Airlines Inc. and United Air Lines Inc., would provide airline passengers with connection speeds of between 1M to 1.5M bit/sec. at a cost of between US$10 and $20 an hour. It would require retrofitting aircraft with Ethernet-type wiring and phased-array antennas to connect to a high-speed satellite service.
Andy McDill, a Delta spokesman, said that given the current issues facing the industry, Delta was "re-evaluating the time line for testing and initial installation of the [Connexion] service, which was originally scheduled for the second half of 2002." This is in keeping with Delta's plans to re-examine its entire IT budget and focus on daily operations, he said.
Terrance Scott, a Boeing spokesman, said he believes Connexion's airline partners remain committed to the vision of broadband access and see value in the business, despite dramatic changes that have occurred since this summer, when the three launch partners signed on with Chicago-based Boeing.
John Wade, executive vice president of Seattle-based Tenzing Communications Inc., which has an agreement to provide slower (2.4K bit/sec.) service to nine foreign carriers, including Hong Kong-based Cathay Pacific Airways Ltd. and U.K.-based Virgin Atlantic Airways Ltd., said that at least seven of the company's airline customers remain committed to that service.
The other two are Helsinki, Finland-based Finnair Oyj, which has halted all new projects, and Zurich-based Swissair Group, which Wade said he assumes is no longer placing a high priority on Internet access. Swissair briefly halted service this week before receiving emergency finding from the Swiss government.
Ken Dulaney, an analyst at Gartner Inc. in Stamford Connecticut, said that deferring technology projects such as Connexion makes sense for the cash-strapped airline industry.
"They're cutting back to the bare necessities and are engaged in a survival strategy," said Dulaney. Given today's realities, he said, broadband access from an airplane is "a luxury."