By Graham Warwick in Washington DC
Boeing is reviewing the future of its Connexion in-flight internet service amid reports that the company could sell it off or shut it down. “Connexion is a good product. I don’t know how good the business is,” says chairman, president and chief executive James McNerney in an interview with Flight International. “We’re going through an examination now to try to understand short-term investment versus long-term benefit.”
Connexion by Boeing was launched in 2000 as a new business unit offering satellite-based high-speed internet service to airlines. The service is in use with All Nippon Airways, Asiana Airlines, China Airlines, El Al, Etihad Airways, Japan Airlines, Korean Air, Lufthansa, Scandinavian Airlines and Singapore Airlines, with Air China and Austrian due to begin service. “It has good customer acceptance, even though it’s gone a little more slowly than we had originally planned,” says McNerney.
The Boeing chief executive also says a review of the company’s space programmes is underway. “We got through a number of issues last year and we’re in the midst of reviewing all of our major products and programmes to assess where we are,” he says. Profitability has been elusive in the satellite business and Boeing and Lockheed Martin have been waiting a year for government approval of a plan to combine their launch vehicle manufacturing and government launch services businesses. A draft of the conditions for approval of the United Launch Alliance venture has been sent to the companies, suggesting a go-ahead is near.
McNerney, meanwhile, says Boeing is under no immediate pressure from airlines to launch a new narrowbody airliner incorporating technology developed for the widebody 787.
“There is some discussion, but I don’t think we’re being beaten about the head and shoulders,” he says. “Customers are making an evaluation of what could be done with some of the new technologies and what we’ve got. And they’re pretty happy with what we’ve got.” When customer demand and technology maturity coincide, Boeing will launch a 737 replacement, he says, “but I don’t think we’re anywhere near that right now.”
Citing signs of a re-engagement between the US government and European Commission over the ongoing World Trade Organisation subsidies dispute, McNerney says: “I’m convinced that the governments can reach a negotiated settlement. I can’t predict how long it will take.” Pointing to two recent trips to Europe by new US Trade Representative Susan Schwab, he says: “Our government is trying to re-engage. I think the re-engagement on the European side is a little more difficult.”
Source: Flight International
