Loiclemeur reports that Boeing’s Wifi in the Sky service – Connexion won’t be offered anymore and it will be stopped due to escalating costs. Boeing Chairman, President and CEO Jim McNerney said “Regrettably, the market for this service h…

The second biggest problem they had was that they needed extremely high uptake (over 30% of passengers per flight) and 10x the number of flights that had been outfitted just to get to break even. Given that they could not control which carriers or which planes had the service, and since they were shut out of the US market, they had no chance of reaching critical mass.

After these, there are numerous barriers to consumption that were never considered included: - access to power - space - security restrictions - lack of technical support for less sophisticated users that couldn’t figure out how to get in, or cope with need to change settings - competition for my time from everything else I could be doing that didn’t cost so much - desire by travellers to be off the grid for a while - did I mention the price was too high?

See a detailed analysis of the numbers and marketing mistakes at:

http://thewaythingsare.typepad.com/antimarketer/2006/08/boeing_booboo.html

Today’s announcement by Ryanair that they plan to enable GSM roaming on their flights provides a useful lesson to carriers thinking of deploying fixed-mobile convergence (FMC) solutions. Historically telephones on aircraft have been a commercial …

http://dealarchitect.typepad.com/dealarchitect/2006/08/thecustomers_w.html

-josh

Don’t mis-interpret Connexion shutting down as a lack of demand for the service from passengers. The passenger usage has been growing consistently since launch and is exceeding the airline’s expectations. Lufthansa has indicated they will find a way to keep service live. The failure was to get a critical mass of airlines to cover their huge fixed costs. The high cost per plane and heavy equipment weight tempered airline adoption. The new solutions (AirCell) being rolled out in the US via ground networks solve both these problems and offer a more attractive price to the passenger.

Market research said there was a big market for this service. But user actions suggest otherwise. As an example, onboard airline telephone systems are often idle, which lead Verizon to cancel its Airfone service.

My hunch is that these activities would rate low on surveys, but are highly valued on airplanes:

* Snooze;
* Daydream;
* Watch movie.

More at:

http://www.ondisruption.com/myweblog/2006/08/boeingpulls_pl.html

AirCell and whatever JetBlue deploys will use air-to-ground transmissions that will allow either company to build a relatively small array of ground stations. AirCell already operates ground stations for general (private) aviation, and has offered services for that market for several years.

OnAir in Europe will use satellite for backhaul to planes, but they’re piggybacking on Inmarsat’s 4th generation satellites, which allow them to buy on a more a la carte basis. They don’t have to lock up and pay for transponders that they’re not using. Their usage costs will be quite high, and look for very high pricing on in-flight usage in Europe because of this unless a ground-station variant is launched, which seems unlikely in the near future.

I keep seeing an emphasis on JetBlue, but they won the 1 MHz license. AirCell won the 3 MHz license, which is where broadband will actually be deployed.

To the commenter who said he heard that Wi-Fi was available on JetBlue already — they may have been announcing free Wi-Fi in some JetBlue terminals, such as JFK.

There is no Wi-Fi available in commercial aviation outside the Connexion service at the moment. JetBlue and AirCell haven’t even received their licenses yet; the final process is still underway at the FCC following the conclusion of the auction a few weeks ago.

But I can see the problem if the same could not be said for the US market – as you all say, that is where the big market potential is for this, not a few travelers from Japan…

Too bad though, it was a good service and I will miss it (until something new comes along…)

They were asking the question “can we get the masses on an airplane to buy it at $30 a pop”. The answer is (and always was) “no, but that’s the wrong question”.

The real question is “if we advertise that our flights have it, how much more can we charge and how many more tickets would we sell relative to our competitors.” This question was never asked – as much as I enjoyed it when it was avialable on Lufthansa, neither my travel agent nor Lufthansa could tell me ahead of time whether the flight would have it when I was booking my tickets. Thus, I was never willing to pay more, but because they didn’t know or promote it.

It’s sad to see a good technical service collapse due to business stupidity.