E-mail at 40,000 Feet

Airlines are Looking to Attract and Retain Their Best Customers by Offering In-Flight Net Access.

It may seem like the airline industry is, at best, idling on the tarmac, or worst, in a tailspin. In-flight comfort is at an all-time low. The amount of delays and cancellations gets worse, not better. And airline personnel on the ground seem to have less access to up-to-date flight information than ever before.

But in one area, at least, the industry is moving ahead cautiously. As part of an effort to lure and retain the highest-paying customers, airlines are starting to test onboard Internet access. The goal is to cater to those frequent-flying businessmen and women who pay for pricier first-class and business-class seats.

"As a business traveler, I am isolated," says Peter Lemme, VP of business development and technology at Tenzing Communications, a Seattle developer of an in-flight e-mail service called Tenzing Global. "When I fly from Seattle to D.C., I lose a day."

So the aim is to provide access to e-mail and the Web while in flight, so high flyers can continue to work. The pricing on those kinds of services—which are still in the test stage—has not been determined, but the goal is to deliver service for less than current onboard phones, which cost about $3 per minute.

The nascent market for such services is heating up. The biggest news so far is from Boeing, which a year ago announced plans to retrofit existing aircraft and to build new planes equipped with the infrastructure, including onboard servers, needed to provide broadband Internet access.

Called Connexion by Boeing, part of the forthcoming service will provide all kinds of digital content, including TV, e-mail and Web access, during flight. The Connexion rollout followed Boeings announcement that it planned to buy Hughes Space & Communications, which will provide the satellite communications services for the Internet and TV access. Boeing expects to launch the service by year-end for commercial aircraft.

At the time, Boeing said it was working with a handful of content and service providers, including CNBC, CNN and Mitsubishi Electric. Earlier this month, the aircraft maker said it was working with ScreamingMedia to provide aggregated content for its Connexion service. The terms of the deal were not released, but it is ScreamingMedias largest deal to date, bigger than an earlier deal signed with AT&T, according to the New York-based firm.

"What Boeing is looking for is third-party content. We had a lot of the content and the relationships already in place," says Adam Ritter, VP of the strategic accounts group at ScreamingMedia.

Boeing plans to use ScreamingMedias SiteWare software that pulls and filters content from 3,000 sources. "We will filter for Boeing the objectionable content like airline crashes," says Ritter. "We will maintain and manage those feeds and bring new content to them if they tell us what they want." The aim also is to customize content so travelers landing in San Francisco, for example, would have access to real-time information about the likes of weather and traffic in the Bay Area.

Boeing isnt alone. Inflightonline, in Bellevue, Wash., is targeting companies with private business jets. Its service provides e-mail, news, stock tickers, movies that can be selected by each passenger, gaming and digital versions of business magazines. "Well roll out our service in the corporate aviation market space where we can have a more one-on-one relationship," says Cathy Willcock, VP of business development at inflightonline.

Tenzing, backed by $45 million in venture capital, is now working with Air Canada, Cathay Pacific, Scandinavian Airlines System, Singapore Airlines and Virgin Atlantic to test narrowband service initially and broadband service eventually.

For now, users access an onboard server via a 56Kbps connection. E-mail is uploaded to the server every few minutes, as is certain Web content, such as weather information and stock-market data. Other Web content is loaded and cached on the server while the aircraft is on the ground.

Tenzing is working on providing access to popular corporate e-mail systems including Lotus Notes and Microsoft Exchange. Eventually, the company will offer broadband service, which will cost between $100,000 and $300,000 per aircraft to equip, estimates Tenzings Lemme.

Its not clear which approach will win out. Tenzing is counting on the fact that travelers are eager to get e-mail access today. Boeing, on the other hand, is wary of another disaster like onboard phones.

Well soon see whether narrowband 40,000 feet in the air is useful. Air Canada last week completed a six-month trial of Tenzing Global in six Boeing 767 airplanes. The company will analyze the results over the next month or two, according to Dick Griffith, a company spokesman. "Generally speaking, the results have been positive," says Griffith. If passengers like the service, Air Canada will deploy it in all of its 376 airplanes over time. The reason? Says Griffith: "We have to do it to remain competitive."