Boeing announced Wednesday that Siemens AG
It's a small beginning to be sure, especially since Boeing first tried to make Connexion fly in a joint venture with AMR's
Boeing, which shares some revenue from Connexion with airline partners, is offering connectivity to individual passengers for anywhere from $15 to $30 per flight. However, the real profit potential clearly lies in corporatewide deals, and as coverage spreads, Boeing's chances of clinching more of these improves. While some might question whether business travelers need always-on surfing capability, it's notable that Connexion also enables voice over Internet protocol (VoIP) connections, providing a cheap substitute to expensive phone service offered on airplanes. In addition to allowing for calls through a laptop, Connexion may eventually add a capability permitting passengers to use VoIP via cell phones.
Connexion's eventual impact on Boeing remains unclear. However, the company already projects that the new service will be profitable by 2007 or 2008. As Connexion continues to roll out, investors should keep a close eye on the virtual skies.
Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.