With Lufthansa almost certain to roll out Connexion by Boeing's onboard broadband internet and e-mail system, rivals are wondering if they can afford not to follow suit

For five weeks, Lufthansa passengers travelling between Frankfurt and Washington DC have had broadband internet and e-mail access in flight.

All the evidence says passengers are delighted, and next year the carrier is almost certain to begin rolling out the system across its 80-strong long-haul fleet.

Its Star Alliance partner Scandinavian Airlines (SAS) expects to introduce the service at about the same time, as does Japan Airlines (JAL). Meanwhile, leading Oneworld member British Airways is just beginning a trial on one of its Boeing 747-400's between London and New York.

The system provider - Connexion by Boeing - is in advanced talks with other carriers, raising the prospect of airlines having to decide whether they can afford not to match their internet-enabled competitors.

Lufthansa has equipped just one 747-400 so far, D-ABTE, which is dedicated to the Frankfurt-Washington route.

Passengers can use their own laptops, or Fujitsu Siemens notebook computers provided on board free of charge, to access the cabin wireless local area network (WLAN). They initially see Lufthansa's FlyNet portal, designed and maintained by Tomorrow-Focus, and can then access the internet and either web mail services or, in most cases, their corporate virtual private networks (VPN).

The aircraft is equipped with a Boeing phased-array antenna enabling 3Mbit/s download and 128Kbit/s upload via satellite. The onboard architecture, crucially including Cisco's mobile access router, ensures messages reach the right destinations.

Project general manager Burkard Wigger says: "So far it has been OK. We will have to evaluate the feedback forms, but it seems the feedback has been very, very good. Many passengers have used their VPN and most had no problem connecting."

He suggests there is little doubt that full implementation will go ahead: "It depends on the number of users, but it is higher than we expected. There is big interest in access to personal e-mail - VPN or web mail."

The critical question facing other airlines is whether they can form a business case.

Lufthansa sees four motives: a relatively minor direct revenue flow from users paying around €30 ($32) per flight; the service's power to attract passengers; operational applications such as telemedicine and customer relationship management in flight; and income to its Lufthansa Technik (LHT) and Lufthansa Services engineering and IT subsidiaries for implementing the system at third-party airlines. The final pricing will depend partly on what Connexion eventually settles on as its own price, and partly what passengers will bear.

Wigger says both Connexion and the airline, now sharing the cost of providing the free service, have an interest in getting it right. "The pricing is our best guess. The first priority is for Connexion to set the detailed price, but I am quite confident we should charge around €30. It is important that Connexion gets a significantly high number of users because the economic model requires that. At a certain price you more or less kill the business case," he says.

Ongoing negotiations

LHT senior vice-president engineering Bernhard Conrad says: "To the best of my knowledge nobody is as advanced as us in these technologies. We are already heavily engaged in negotiations with airlines as well as with Connexion."

Close co-operation with Connexion has resulted in LHT holding the supplemental type certificate (STC) for the aircraft distribution system, although Connexion has the STC for the antenna installation. More STCs will be needed for other aircraft such as the Airbus A340 and for other airlines.

The engineering task is one of two major reasons - the other is the wait for fuller satellite coverage - why Lufthansa will not begin fleetwide roll-out until the second quarter of 2004 even though its trial ends in mid-April this year.

Conrad believes the planned 80 aircraft can be equipped in two years, but the programme will not start until the complex work schedule covering most of the fleet is in place. He says: "We will not only do it during D checks. For the first aircraft we did it in the D check because we needed the experience. A lot of the engineering was not quite complete because we wanted to see how we could ease it for the mechanics.

"In future we will use any ground time. It may be phased or with 'tiger teams' at specific locations. We want minimum ground time, but cannot afford to let it run too long as passengers will demand it 'tomorrow'."

Talks are under way with Airbus to develop the engineering needed to equip A340s and A330s - vital for Lufthansa, and for SAS, which will be fitting 11 A340s in its Connexion programme.

SAS manager in-flight communications Johan Eriksson calls it a "touchy subject", but both he and Conrad say Airbus is co-operating. The airframer has little choice, although it faces having to support an activity which not only feeds Boeing revenues but competes with airborne e-mail provider Tenzing, in which Airbus is a shareholder.

On coverage, Conrad adds: "There are only two satellites and only a limited area in the world where you can have the service. It disappoints the passenger if he can only use it on some flights. We want the major part of our network covered."

SAS's business case is different from Lufthansa's, but it has a powerful incentive to provide broadband and will not run a trial. "We need to excel in this area," Eriksson says. "It is a question of what our customers are demanding from us. We have Sony, Ericsson and Nokia in this part of the world, who all travel a lot, and have a very high demand for mobility and connectivity. So for us this is a product offering that will underline the commitment from SAS."

Killer application

Eriksson adds: "A survey of 600 of our main customers showed that VPN e-mail is the killer application. When it comes to making a business case we are not looking at something that will generally make money. If we can find a cost-neutral solution that enables us to offer a great product that makes our passengers happy, then that is a great thing. We already have a lot of passengers comparing it to 24h broadband access in a hotel."

JAL intends to launch Connexion on 10 747-400s in June 2004 with a more complex charging scheme that will depend on content and flight duration. It also believes it will have to offer both WLAN and Ethernet cable access depending on which in-flight entertainment equipment is on board.

Source: Flight International