Boeing May Sell Or Shut In-Flight Internet Unit

June 22, 2006

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Boeing may sell or shut down its in-flight Internet venture Connexion after six years of failing to turn a profit on the business, according to a newspaper report on Thursday.

Citing people familiar with the situation, The Wall Street Journal said Boeing has queried a number of commercial-satellite operators and other potential suitors who might be interested in buying the business or becoming a major partner.

If a suitable deal cannot be reached, Boeing is prepared to shut Connexion down, even though the service works as advertised and is used by a handful of international airlines on long-haul flights, one of the sources said.

Boeing has not said how much it has invested in Connexion, but people familiar with the situation say it is about USD$1 billion, the Journal said.

Some industry officials say the business, because of lack of interest among US airlines in outfitting their fleet with the system, may be worth no more than USD$150 million, it said.