Apparently, Boeing is shutting down their in-flight Internet Service due to lack of a market. Astute readers may remember a cool post about this subject from a few months ago when I was returning from RIPE in Turkey. It was fun to watch the updates to the global routing table cascade across the Internet as my plane crossed the Atlantic.
At the time, I was impressed with the service and the value. It was a great way to get a bunch of work (and a blog posting) done while stuck on an airplane. According to Boeing, I guess not enough people agreed. But I think there were ways that this service could have succeeded.
This may have been a fairly classic channel problem. Boeing makes planes, services planes and sells them to airlines. Airlines fly planes. It was never clear to me why Boeing was the right company to offer the Internet service on planes. Obviously, the infrastructure to offer the service would be more cost-effective when spread among several airlines. That would also have the effect of building a market.
As I pointed out previously: in order to build a market for this sort of service you have to offer two things consistently: power and connectivity on every flight a business person is likely to get on. Once there exists the general assumption that power for laptops and connectivity via wireless is available on every flight on an airline, people will begin to rely on it and use it in greater numbers. It’s possible that the demand would still not have materialized, but given the way many airlines rolled out this service (haphazardly) we will never know.
A really interesting suggestion was made to me recently by Mike Hughes, the Chief Technology Officer of LINX, the member-owned London Internet Exchange: Why not run Connexion as a member-owned coop just as the LINX and AMS-IX Internet exchanges are run? The airlines could contribute capital costs (to purchase the defunct service from Boeing and capitalize some operations). And a member-owned cooperative could run it.
It’s clear that this is not a strict competitive differentiator among airlines: no one airline could possibly afford to operate the service by themselves. It’s also clear that this venture is not obviously profitable. So why not use it to drive more volume of travel in general, and improve productivity of travellers?