Singapore Airlines to install inflight Wi-Fi

The Asian airline announced on Tuesday that it has signed a letter of intent with Boeing's wireless technology unit to give passengers access to a broadband connection on some of its long-haul flights next year.

Under the agreement, 40 of Singapore Airlines' planes will be equipped with Wi-Fi connections to high-speed satellite service. The hot-spot connections will allow passengers to surf the Web, to send and receive e-mail and to view broadcast TV channels, according to Connexion by Boeing.

The airline is the latest major air carrier to sign up with Connexion by Boeing and to explore broadband service as a way to generate revenue. Analysts have identified travel locations--airplanes, trains and other places where traveling business users are essentially captive--as a category likely to offer successful business opportunities for Wi-Fi hot-spot and broadband service providers.

"Provided that they don't overprice it, it will be a winner," said John Yunker, an analyst with research firm Pyramid Research.

Hot spots are public areas where resources such as broadband Internet access are available through wireless networks that use Wi-Fi technology. The market for hot-spot service is very young, and many of the players in the market are still developing their business models. None has yet said that it is making money with such a service.

The fees for Connexion by Boeing's Internet service are still being determined, according to Sean Schwinn, director of business development at the company. However, trials conducted earlier this year by the technology provider indicated that passengers are willing to pay up to $35 for the service on a flight lasting 7 to 8 hours.

Connexion by Boeing is also considering other payment models, such as hourly rates. Earlier this year, Lufthansa began looking into allowing frequent customers to use air miles to pay for Internet service.

"We know that we have to deliver a good value, and pricing is one of the topics we have spent a lot of time on," Schwinn said. "We will be priced competitively with the competition…We know if we're not, we won't get off the ground."

Schwinn added that Lufthansa will be the first airline to offer Connexion by Boeing's service.

Connexion by Boeing has service agreements with Lufthansa and Scandinavian Airlines and has finished a trial with British Airways. Japan Airlines and All-Nippon Airways have announced their intent to install the service on their long-range planes.

Singapore Airlines operates 81 passenger planes. Installations of the equipment needed to use the service on planes are expected to begin by the third quarter of 2004, with service availability shortly thereafter, according to Connexion by Boeing. Financial terms of the deal were not disclosed.