Connexion causes Boeing Q3 profit loss

Boeing recently posted a third-quarter profit fall of 31% on charges for ditching its in-flight internet service Connexion

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Boeing recently posted a third-quarter profit fall of 31% on charges for ditching its in-flight internet service Connexion.

The aircraft manufacturer posted third quarter net earnings of US$694 million, or $0.89 per share, compared with $1.01 billion, or $1.26 per share, for the same period last year.

In a statement, Boeing chairman, president and chief executive officer Jim McNerney said: “Total consolidated debt decreased during the quarter to $10.1 billion due to the cancellation of capital leases associated with Connexion.”

Boeing confirmed in August that it would discontinue its six-year-old Connexion arm of the business because it hadn’t attracted much interest from airlines, despite investments in resources and technology.

A spokesman for the US-based manufacturer explained that the market for the service had not developed as expected.

Adoption of the Connexion service was slower than initially anticipated, compounded by usage of passengers being far below what was expected to create critical mass for the business.

“We made our decision after conducting a thorough review of the business.

This decision best balances the long-term interests of all parties with a stake in Connexion,” he said.

“This was not a technology issue.

It was a market issue.

We’re seeing penetration numbers in the low single digits after two-plus years of commercial service, which isn’t in line with our expectations for the business,” he added.

Connexion by Boeing was installed on 156 commercial aircraft with 12 airlines, including Abu Dhabi-based Etihad Airways, ANA, Asiana Airlines, China Airlines, Japan Airlines, Korean Air, Lufthansa, SAS and Singapore Airlines.

Connexion was also used for executive aircraft operated by the US government, by maritime commercial shipping customers, and by other executive aircraft operators.

The Connexion service will be phased out by the end of the month.

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