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Fliers to get Net link
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June 13, 2001: 12:58 p.m. ET
Boeing, top 3 U.S. carriers to connect 1,500 jets with the Web starting in '02
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NEW YORK (CNNfn) - Aircraft maker Boeing Co. joined with the nation's three largest airlines Wednesday in a joint venture to bring high-speed Internet connection to fliers.
The effort will give airline passengers access to the Internet as well as e-mail, corporate intranets, live television and entertainment while in flight.
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Fliers would spend $20 to $25 an hour for high-speed Internet access under service being planned by Boeing and the nation's largest airlines. | |
The joint venture, known as Connexion by Boeing, will be owned by Boeing (BA: up $0.55 to $66.26, Research, Estimates) as well as United Airlines parent UAL Corp. (UAL: up $0.01 to $33.51, Research, Estimates), Delta Air Lines (DAL: up $0.27 to $43.65, Research, Estimates) and AMR Corp. (AMR: up $0.03 to $36.13, Research, Estimates), the holding company that owns both American Airlines and Trans World Airlines.
Among them, the three airlines carry more than half of U.S. air passenger traffic.
The first installation of broadband equipment is expected for the second half of next year. The three carriers are committed to equipping a total of 1,500 jets with the connection, which would be a large majority of their aircraft. There was no estimate as to when the outfitting of the 1,500 jets would be complete, though.
Cost of using the service is not yet set, but Scott Carson, president of Connexion by Boeing, estimated it would be in the range of $20 to $25 an hour. He said the cost would be determined partly by the demand for the service.
Some of the initial 1,500 jets to be outfitted will not be Boeing planes, as American and United both operate some Airbuses. The partners also are talking with dozens of other carriers worldwide about participating in the service and expect to announce other participants soon.
Exact financial terms of the joint venture were not disclosed, nor were estimates about the cost to develop the service. Boeing will be the majority partner and the three airlines will hold equity positions. The four partners will contribute funding, certain intellectual property and other assets necessary to carry on the business of the proposed venture.
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The companies said the next step for the partnership is to finalize plans for the service offering and business plan and complete the definitive agreements needed to launch the service.
Suppliers, including content providers, will include Loral SkyNet, a unit of satellite maker Loral Space & Communications Ltd. (LOR: up $0.07 to $3.18, Research, Estimates); Alenia Spazio, an Italian provider space systems and hardware; Japanese satellite technology and transponder company Melco and ScreamingMedia Inc. (SCRM: up $0.07 to $3.25, Research, Estimates), which aggregates digital content for Web sites as well as providing a technology platform for content. Content providers include CNN, the parent of CNNfn, as well as CNNfn competitor CNBC.
Airline executives at a press briefing Wednesday said they anticipate the service also will be useful in controlling their own costs. Diagnostic information about the jet could be sent to the ground, allowing quicker maintenance. And, in case of delays, flight attendants could work to solve customers' connections real-time while the plane is still in the air. 
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