Connexion by Boeing faced tough times following last year's terror attacks in the US. Airlines shelved plans to take equity stakes in the company. Other potential customers found it hard to justify expenditure on major inflight entertainment (IFE) initiatives.
But Connexion remains convinced that airlines will adopt its broadband air-to-ground services as soon as they see tangible economic recovery. Curt Nohavec, newly-appointed chief financial officer of Connexion, talks to Mary Kirby
Q: Please outline Connexion's presence at Farnborough.
A: Connexion president Scott Carson is on hand to speak with prospective airline customers. We have brought the Connexion One test-bed aircraft here to make live demonstrations of our entertainment and data communication services.
Q: What sorts of hurdles have you faced since 11 September?
A: Obviously there has been a tremendous amount of financial pressure. We're seeing a little more interest in the last couple of months by the airlines. I think that as they regain their financial health – and that is a key concern to us – we will be well positioned for the future. International carriers are turning to Connexion faster than US majors.
Even in an economic downturn, however, airlines still have to market their services to differentiate themselves from their competitors. Even those US majors that face economic hurdles are interested and looking at what broadband has to offer.
Q: Do you anticipate forging new agreements with United, Delta and American?
A: That is our hope. We have been in ongoing discussions and there continues to be a lot of interest by those carriers. Whether it will be an equity agreement or not, we're not sure. The airlines continue to have big interest in our product; they see the value of putting it on the aeroplane. It's just a matter of economic recovery.
Q: What other airlines are you in discussions with?
A: We have had some discussions with Singapore Airlines along with numerous others. We're talking with most of the majors. We have a working group of 15 leading airlines helping us to define the preferred service for the airline industry so that Connexion is ready to go when the market recovers.
We are optimistic that some of those 15 airlines will adopt our services. The fact is that airlines are sending people to help us in our thought process, and this is a positive sign for us.
Q: Tell me about your plans for winning corporate and government aviation contracts.
A: We expanded our focus on government aircraft and business jets after 11 September and there has been interest. It's a smaller piece of Connexion's business base. We are still largely focused on the commercial sector.
Q: Connexion recently secured a second trial airline for its broadband in–flight Internet and e–mail services, with British Airways signing for a three–month trial. Is Connexion still on track to begin trials with its first European customer, Lufthansa, by early 2003?
A: All of that is on track and we're very positive about it. The satellite providing North Atlantic coverage, on which Connexion is leasing space to provide Lufthansa's services, is also on target to be launched later this year.
Q: Connexion has already received US Federal Communications Commission (FCC) licensing for broadband communications to aeronautical mobile platforms, and is in the process of securing the necessary non–US regulatory approvals. How far away are you from attaining these?
A: There are several regulatory type licenses that we need. One of the key dates we're working on is mid–2003. At that time the World Radio Conference – which comprises most NATO member countries and Middle Eastern countries – meets and decides on licence applications.
We have to make sure that the countries fully understand our system. We have received extremely positive feedback. There are issues we're working through, but our overall impression is that we expect to receive the necessary licences to offer services worldwide.
Q: Apart from entertainment and communication services, what other applications of Connexion's services are you exploring?
A: We're starting to talk to the airlines about potential applications for the cockpit. There are applications that we can see downstream, in terms of taking the ‘black boxes' off the aeroplanes so that all of that data would be recorded on the ground in real time.
We're exploring the idea of the paperless cockpit, helping the airlines with their crew scheduling, bringing on real–time weather forecasts, and enabling maintenance information to be transferred from the aircraft to the ground. There has been some thought put into cabin video surveillance systems and being able to project those images to the ground, but I would say those things are still in their infancy.
Q: How do you see Connexion's future?
A: If you look at our vision, our hope at Connexion by Boeing is that we will add value to the Boeing Company and to the airlines as well.
We want to provide passengers with a new environment that they will find useful and will add to their entertainment value. To make this work, we need to bring value to all three segments – Connexion by Boeing, the airlines and the flying public.
Source: Flight Daily News