In-Flight e-mail: a Two Horse Race?
By Ian McInnes
When Rockwell International decided to write off its US $30 million investment in In-Flight Network, citing slow market growth, market pundits were surprised: In-Flight had been marked as long-term survivors.
Now only two serious contenders for the lion's share of the in-flight e-mail and Net access market remain: Tenzing and Boeing's Connexion.
The airlines have been slow (make that slothlike) to take up the in-flight Internet torch because of suspicions about the reliability of the technology coupled with concerns about bandwidth and firewall issues. That looks set to change and soon.
Boeing's Connexion service, which is two-way broadband, was tested extensively last year by Boeing's CEO Phil Condit, who spent 10 weeks in the air using the technology himself. His verdict: thumbs up.
The service is in testing on some private jets. Initially, it will only be available on US domestic flights. Roll out will be over a five-year period beginning early 2002. Boeing has predicted that Connexion will generate US$10 billion in revenue by 2010. Apart from Internet access and e-mail, Connexion will tap into the potentially lucrative entertainment market as well, courtesy of Net content syndication hub ScreamingMedia.
An industry source alleges that Airbus will take a large equity stake in Tenzing, who will supply and fit their in-flight Internet and e-mail system to Airbus' aircraft. According to the source, who spoke on the condition that they not be identified, the deal is to be announced at the Paris Air Show next month.
This Tenzing/Airbus deal (if it really is happening) could make a major dent in Boeing's forecasts for Connexion. Airbus said last year that they would launch their own service sometime in the first half of 2002 on the new A340-600 aircraft. It looks like they may have decided that it was a better idea to go with Tenzing now and so gain a stride on arch rivals Boeing.
The Tenzing system is simpler than Connexion and may well turn out to be less expensive to implement. Instead of using onboard servers, Tenzing offers pre-selected Web sites and e-mail feeds, eliminating the need for satellite links. As far as content is concerned, Tenzing made an agreement with in-flight entertainment provider Airia last year.
By keeping it simple, Tenzing has got ahead of the competition and reached the marketplace first; they have already signed up Singapore Airlines, Cathay Pacific, and Virgin Atlantic. And, if the Airbus deal goes ahead the potential is enormous, apart from the aircraft that are already in service Airbus have orders for more than 4,200 new aircraft. Jim Miller, Senior Director of Airline Alliances for Tenzing Europe, Middle East, and Africa refused to confirm or deny the possibility of an alliance with Airbus. No one at Airbus was available for comment.
Airlines have been sitting on the fence up until now to see which system will win out. However, they must be getting set to jump one way or the other now. American Airlines, (which operates both Boeing and Airbus aircraft) said last year that they would not be going with an onboard e-mail system during 2000, it may well make a decision this year.
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