Connexion by Boeing may have the airborne broadband communications market to itself for now, but rival Inmarsat is poised to challenge
a slow start, Boeing's Connexion broadband communication service is up and running, and the customer list is growing steadily.
The service was launched by Lufthansa in May and the manufacturer now has All Nippon Airways, Japan Airlines and Scandinavian Airlines signed up as customers, with letters of intent from China Airlines, Korean Air and Singapore Airlines. In late August, Boeing announced South Korean carrier Asiana Airlines as the latest signatory of a letter of intent, with plans to put Connexion on board its long-haul fleet from July 2005.
"We expect to make some more announcements soon," says Boeing. "In general, the market is doing quite well in Asia and Europe. In the US the current economic health of those airlines, compounded by fuel prices, continues to slow or delay their purchase decisions on connectivity. Yet we continue to have discussions with the majority of the airlines within the US market."
Connexion launch customer Lufthansa has 10 aircraft equipped, some of which are in service and the rest undergoing testing. So far passenger response has been as expected, says Boeing. "We are seeing about a 3% usage rate on flights today, which is where we expected to be. We expect to reach a usage rate of about 6% at the end of the year and eventually grow to a mature usage rate of 20%." Connexion is proving popular with business travellers, it says.
Boeing says it has "many new services under evaluation and in implementation", including onboard cellphone use. The next major service offered will be live television, planned for the first half of 2005.
Expansion of the satellite network as new customers come online is also planned. Boeing says it has enough satellite coverage to support its launch customers, covering routes in the northern hemisphere from the west-coast USA through to Europe and the eastern Pacific Rim. "In the mid-2005 timeframe, we will add coverage for North and South Pacific air traffic, and in early 2008 the balance of the Pacific. Additional regions will be covered using capacity we have already procured on existing satellites."
Investment decision
The manufacturer has always declined to reveal the cost of Connexion - estimated by some in the industry to be more than $600,000 per aircraft. With equipment costs, installation costs and subsequent aircraft downtime - eight to 10 days for the Connexion installation alone, according to Lufthansa - it is not an investment decision taken lightly.
"It would be better to ask what service brings the best value to the airline for its needs," says Boeing. "The key is providing the best and scalable value for the requirements to meet market demands."
Despite Boeing establishing itself in the broadband market, it will not have the sector to itself, with satellite communications (satcom) pioneer Inmarsat and its service providers preparing broadband offerings that will become available with the new Inmarsat-4 satellites in the next two years.
Inmarsat knows a thing or two about in-flight communications, with 7,000 aircraft using its satcom services today, of which 4,500 are using the airline-based Aero-H, H+ and I services. Almost all the widebody, long-haul aircraft fleet is equipped with Inmarsat satcoms for safety, operational and passenger services, according to Lars Ringertz, head of marketing, aeronautical business. "We are well embedded in the market," he says.
Inmarsat is offering airlines an evolutionary approach to broadband services, starting with the Swift64 service that was launched two years ago. Swift64 offers a data rate of 64kbit/s - a vast improvement on the snail-pace 9.6kbit/s available for years with Aero-H. Users who want more bandwidth are banding channels together to achieve data rates of 250kbit/s-plus. "That's more than sufficient," says Ringertz. "It all comes down to what type of usage you have."
Inmarsat's Swift64 customer base continues to grow and is about to hit a "significant number", says Ringertz. He declines to reveal how many aircraft are using Swift64, but it is believed to be approaching 500, with many of the early adopters being corporate jets, head-of-state aircraft, government and VIP transports.
Swift64 is the first step on an evolutionary path to the broadband services that will be possible with the Inmarsat-4s and a lower-cost option for airlines than embarking on Connexion, according to Inmarsat. "Many airlines are wary these days," says Ringertz. "They've gone through in-flight phones. Everyone wanted them but passengers didn't use them, so airlines ended up ripping them out. Airlines today are reluctant to invest in loads of equipment that they later have to rip out again."
He says airlines are well aware of the weight and fuel-burn issues that often accompany new technology. Airlines can start with Swift64 and follow a "transparent path" with a "scalable solution" through to broadband Inmarsat-4 services.
The first of the new Inmarsat-4 satellites, to be positioned over the Indian Ocean, is scheduled for launch in the first quarter of 2005. The second will be launched to the Atlantic Ocean region in the second quarter of the year, with the third, covering the Pacific region, to follow.
Manufacturers are expected to have Inmarsat-4-compatible avionics available next year, but the full Swift Broadband aeronautical service will not be officially launched until the second quarter of 2006, says Ringertz. "By the end of 2006 we will have global coverage of Swift Broadband."
Inmarsat is not concerned that this timeframe gives Boeing a lead, confident that its evolutionary, low-cost, low-risk solution will appeal to many airlines.
Ringertz says Swift Broadband will not require costly new equipment, but will make use of the existing Inmarsat high-gain antenna with only the avionics needing upgrading. Also, the upgrade does not involve aircraft downtime. "The upgrade is overnight. You take out the Swift64 avionics and slide in the new box. You might have to replace the amplifier as well."
Total weight of the avionics will be 42kg (90lb) - another important factor for airlines, particularly in these times of rapidly rising fuel costs, says Ringertz.
Inmarsat believes its broadband offering will meet the needs of most airlines in terms of bandwidth, even though it is significantly less than Connexion's 5Mbit/s forward link and 1-2Mbit/s return link. Each channel will support 432kbit/s, with avionics manufacturers proposing two- or four-channel systems, plus the chance to bond channels together to boost rates.
Inmarsat service providers are keen to offer Swift Broadband, says Ringertz, and a number of potential service providers have approached the company.
New partnerships
New partnerships are also forming. At this year's Farnborough air show, for example, Inmarsat service provider Sita, airframe manufacturer Airbus and its Tenzing in-flight e-mail provider subsidiary announced plans to establish a new company to provide Swift Broadband services.
The alliance follows considerable positioning in the sector, including Airbus's 30% purchase of Tenzing in 2001 in response to Boeing's Connexion move. Airbus and Tenzing had partnered Arinc and Astrium in a 2001 deal intended to lead to the creation of a new company to offer airlines broadband connectivity services. That never came to fruition, however.
Arinc's broadband communication developments are now through its SkyLink system, which was launched in the business jet market in April. ARINC plans to reveal details of its SkyLink service for airlines at next week's World Airline Entertainment Association show. The system uses the SES Americom Ku-band satellite network over North America and coverage expansion is planned for North Atlantic routes, Europe and the Middle East in 2005. SkyLink, which will be available to airlines in late 2005, will support 5Mbit/s to the aircraft and 256kbit/s off-aircraft, using equipment that is smaller, cheaper, lighter and more capable than competing systems, says Arinc. SkyLink will support broadband services including live TV and high-speed internet, plus flightdeck services, it says.
Ringertz concedes some airlines will decide Connexion is best for them, but believes there is room for both. He says Inmarsat's use for aeronautical safety services gives it an advantage because airlines will still need Inmarsat satcom. He also argues Inmarsat is providing global coverage with its own managed and owned network of satellites and has a proven track record in satcom.
Boeing welcomes the competition and believes it too has the best service offering, replicating the experience passengers are used to on the ground and having enough capability to support airline operational services. "Our service offering provides the best value for both customers and passengers - and is available today," it says.
EMMA KELLY / PERTH, AUSTRALIA
Source: Flight International
