Boeing Eyeing Sale or Closure of Connexion

Boeing Co. is considering selling or closing down its 6-year-old Connexion Internet venture amid a lack of demand by U.S. airlines for the service, a published report said Thursday.

The aerospace company has contacted commercial-satellite operators and other firms that might be interested in either buying the business or becoming a major partner, The Wall Street Journal reported, citing unidentified people familiar with the situation.

Boeing did not confirm or deny the report but acknowledged the business is under review.

"We're evaluating the long-term business model for Connexion to assess what's best for both the business and our customers," spokesman John Dern said. "The system's performing well, we know we have a useful product, but we're trying to determine how good a business we have."

He said no decision has been made concerning the unit.

Connexion enables passengers to have high-speed Internet hookups, via satellite, in flight at a cost of $10 to $27. First announced in April 2000, it suffered a major setback with potential U.S. airline customers after the industry turmoil resulting from the 2001 terrorist attacks.

Several international carriers provide the service, including Lufthansa, Japan Airlines and Singapore Airlines, but strapped U.S. airlines have been reluctant to pay the cost of outfitting their planes with it.

The Journal said Boeing has had detailed sale discussions with Luxembourg's SES Global SA and made preliminary pitches to two other satellite firms, London-based Inmarsat PLC and New York-based Loral Space & Communications Inc., all of which declined to comment.

The reported interest in a sale or shutdown comes just after an auction of nationwide airwaves by the Federal Communications Commission that could lead to cheaper in-flight broadband. Boeing did not take part in the auction despite earlier expressing interest.

Boeing shares fell $1.79, or 2.1 percent, to close at $84.06 on the New York Stock Exchange.

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