Airfone to Halt Commercial Jet Service

Verizon Airfone, long the only company to offer seatback phone service on commercial airplanes, intends to close down the service before the end of the year, a spokesman said Friday.

Airfone, the former GTE unit acquired by New York-based Verizon Communications Inc. in 2000, is working with its airline customers on the transition, said Jim Pilcher, director of marketing for Airfone.

"The decision is based on Verizon Communications' strategy to focus on its core business, which is broadband, wireline and wireless," he said.

Airfone has its telephones in about 1,000 aircraft operated by Continental Airlines Inc., Delta Air Lines Inc., UAL Corp.'s United Airlines and US Airways Group Inc. It will continue to provide telecommunications services on about 3,400 corporate and government planes.

The fate of Airfone's 140 employees remains uncertain while the company explores a possible sale of the commercial-airline portion of its business. Pilcher said some employees could be transferred within Verizon but "we need to balance the human resources with the expenses incurred to run the business."

Airfone signaled its waning interest in the business last month with an early exit from an auction of nationwide airwaves by the Federal Communications Commission that could lead to cheaper in-flight broadband. Its apparent maximum bid of $12.4 million was surprisingly low for the country's largest telecommunications company.

The auction winners, JetBlue Airways Corp. and AirCell Inc. of Louisville, Colo., posed a new competitive threat for Airfone because they are expected to develop wireless hot spots on planes enabling passengers to check e-mail and potentially make Internet-based phone calls.

Dropping out put Airfone on a two-year deadline to shrink the bandwidth used by its in-flight phone service, which began in 1984, in order to allow the new licensees to operate. Its current license expires in 2010.


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