Lufthansa Launch Customer for Boeing's IFE

Lufthansa has agreed to become the international launch customer for Boeing's Connexion broadband inflight entertainment service, with plans to test the service on a single aircraft next year.

The deal represents a major win for Connexion in its on-going war of words and over market share with Airbus's Tenzing satellite link. Lufthansa's Wolfgang Mayrhuber, CEO Passenger Airlines, says that the airline looked at Airbus's service, but preferred the Boeing approach. Boeing is offering a broadband system, while Airbus has focused only on a narrow band link.

The deal is the second major announcement for Connexion in as many weeks. Boeing last week got American Airlines, Delta, and United Airlines to become stake-holders in the venture. However, the Lufthansa agreement is different. "They did not chose to be an equity participant in the business," says Boeing's Scott Carson, president of the company.

Next year the two companies will equip a 747-200 to assess the feasibility of the system over a three-month period. The aircraft will receive Boeing's phased-array antenna that makes the link to the Ku-band satellite possible, and the on-board information distribution system. It will fly north Atlantic routes between Europe and the U.S. East Coast and Midwest. That assessment will also be used to refine how the service operates.

If the test is successful, Lufthansa will equip 80 more long-range aircraft. Mayrhuber says that after talking to Boeing for more than 18 months, he's confident the demonstration will have positive results. The carrier will not install the system on its shorter-range flights, because the average flight time of about an hour wouldn't make it viable.

Boeing was keen to get its first overseas customer. "The European market is extremely important to our international success," Carson says.

Boeing's vision of what Connexion can do for airlines goes beyond what they now think is possible. For instance, James Albough, Boeing's president and CEO Space and Communications, says the system may eventually take the place of onboard entertainment systems. But Mayrhuber doesn't think that makes sense. Furthermore, he says, service offered may vary regionally. While live TV may make sense in the U.S., the same isn't necessarily true in Europe and Asia.

The satellite network to enable Connexion is still growing. However, by the end of 2002 Boeing expects to have leased 11 transponders for U.S. operations and 13 over the Atlantic. As the market expands, so will the number of transponders Boeing plans to lease.