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Boeing Revamps Aviation Strategy

By | June 23, 2003

      Boeing [NYSE: BA] is revamping its aviation communications strategy, combining its Connexion by Boeing satellite broadband service with advanced avionics, the company announced during the Paris International Air Show last week.

      Boeing said its e-Enabled Advantage integrated service will help airlines cut costs, improve dispatch reliability, reduce delays and cancellations, improve passenger service, enhance aviation security and provide real-time situational awareness for both flight crews and airline operations centers.

      The architecture of the system has four underlying components: a central onboard network integration cabinet under development by Boeing and Rockwell Collins [NYSE: ROC]; the Jeppesen avionics package known as the electronic flight bag (EFB); advanced ground-based software applications; and the Connexion by Boeing service.

      Questions about whether enough passengers would be willing to pay money for in-flight broadband services could have spurred Boeing to unveil the revamped strategy in an effort to generate additional revenues.

      Andrea Maleter, technical director at Bethesda, Md.-based consultancy Futron, said the expanded Connexion by Boeing concept presents a “very interesting” opportunity.

      “Building an integrated set of hardware and software solutions for enhanced flight operations services, as well as passenger communications services, provides a more economical and compelling approach than stand-alone passenger broadband services,” Maleter said.

      Marshall Kaplan, a Rockville, Md.-based aviation and space consultant, said he was unsure the revamped service would turn Boeing’s in-flight satellite communication services into a success.

      “I think the market for [the services] remains to be seen,” Kaplan said. “They have to demonstrate a real advantage for airlines to buy it now because those companies are so strapped for money. The airlines aren’t going to invest in anything unless they are sure it is going to save them money.”

      Despite the cautious outlook of industry consultants, Boeing executives are bullish. The integrated service is one of the “most significant” advances in commercial aviation today and in the future, said Mike Cave, senior vice president of Boeing’s Commercial Aviation Services.

      The Connexion by Boeing service would allow airplanes to act as hubs for the airline’s global operation and information network, said Sean Griffin, a company spokesman.

      A network cabinet will function as the “brain on the plane” by managing and routing data input and output to the outside world, said Connexion by Boeing President Scott Carson.

      Certain “e-enabling” applications and capabilities are available today, including the EFB and Connexion by Boeing service. Jeppesen will help to develop applications for the core network cabinet, as well as create a developer’s toolkit to let airlines and third parties build applications, Boeing officials said.

      Among the applications that will be available in the near term are fuel tracking, cashless cabins, maintenance tracking and airline operations center data offload, Boeing officials said. Potential second-generation applications include cabin inventory; crew scheduling/rerouting; connecting gate/ reroute guidance; electronic software delivery; enhanced cabin resource management; real-time weather displays; and video surveillance.

      The Jeppesen EFB will serve as the focal point for the “e-enabled” flight deck. The EFB currently offers a user-friendly digital interface containing all documentation and forms carried by the pilots – aeronautical charts, manuals for fault reporting and operations, minimum equipment lists and logbooks.

      In addition, the EFB can provide real-time weather information and improved situational awareness through a taxi-position application. The EFB also includes an on-board performance calculator and electronic checklists, as well as a display that can be used to host cabin-to-flight deck video feeds.

      Latest Demonstration

      The Connexion by Boeing service aimed at passengers took another step toward commercial launch last week when British Airways [NYSE: BAB] said it had successfully completed a three-month demonstration that began February 20. The service was tested on selected flights between London and New York. Passengers were able to communicate with family, colleagues and the office by e-mail, as well as access the Web and corporate intranets.

      “For British Airways, this clearly was not a technical demonstration of the Connexion by Boeing service, but a validation of how passengers might use the service and their willingness to pay for in-flight connectivity,” said Kevin George, British Airways’ senior manager for marketing brands.

      Teams from British Airways and Connexion by Boeing are analyzing data gathered during the demonstration. British Airways will review the findings, then decide on equipping its long-haul fleet of aircraft with the service.

      The Connexion by Boeing team is continuing to work the global regulatory process, certify the next-generation antenna and define the satellite and ground-based networks that will help broaden the availability of broadband connectivity in flight. The International Telecommunication Union is considering an allocation for the service in the 14 GHz to 14.5 GHz band.

      Connexion by Boeing’s in-flight broadband service is available today to the executive services market in the United States that includes operators of private and government aircraft. Connexion by Boeing recently signed an agreement with German airline Lufthansa to outfit its fleet of 80 long-haul aircraft with the service beginning in early 2004. — Paul Dykewicz

      (Sean Griffin, Boeing, 206/655-9359; Andrea Maleter, Futron, 301/347-3450; Marshall Kaplan, 301/721-2635)

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