Tenzing Offers Low-Cost Alternative To Boeing's Connexion

So, you're flying again and this time it's with someone else at the controls. It's a long flight and very quickly, you're bored to tears. What's a poor flier to do?

Go online, of course.

Back In The Saddle Again

With a big cash infusion from investors in December, Seattle-based Tenzing has scaled back its airborne Internet service to offer a simpler system to deliver the one thing it claims Web surfers really want at 35,000 feet: e-mail.

"Our surveys show 86 percent of people log on to the Internet to use e-mail," said Tenzing Chief Executive Alan McGinnis.

9/11 Hit Tenzing Hard

Sideswiped by the air travel slump that has drastically weakened so many airlines since the Sept. 11, 2001, attacks, Tenzing slashed payroll and dropped plans to include real-time Web surfing in its in-flight package, now in trials at Cathay Pacific Airways and Virgin Atlantic Airways.

McGinnis declined to say how much money Tenzing's board members and other investors contributed in December, but the company is hiring again, and planning to boost its payroll by 25 percent from 65 now.

Tenzing was launched in 1999 has since raised more than $50 million, including major investments from aircraft maker Airbus, SAS and Cathay Pacific's Taikoo Aviation Technologies.

Avionics manufacturer Rockwell Collins Corp. last July invested $10 million in Tenzing and sent an executive, Steve Piller, to act as Tenzing's chief operating officer.

Tenzing's main competitor, Boeing's Connexion unit, offers a far more ambitious and expensive, high-speed Web service.

Tenzing claims it can often outfit an airplane in a matter of hours with a single shoebox-sized computer server that beams e-mail and short messaging service (SMS) to the ground using the aircraft's existing antennae.

Passengers can connect using their own laptop or, as in the Virgin Atlantic trial, use seat-back video screens.

Connexion: Too Expensive? Depends On The Flight

Tenzing has said from the start that Boeing's service will take too long to install, deliver more than the customer really wants and cost too much.

"The airlines want to make sure what little money they spend is not wasted," McGinnis said. "Our overhead is lower and we can charge less money."

Tenzing's estimated cost of $15 to $20 per flight to the passenger for e-mail, and its current trial price of $2.50 to send an SMS, are well below Connexion's target of $25 to $35 per flight.

To date, Tenzing's service is available on 39 of Cathay's 69 jetliners and it plans to outfit the entire fleet by the end of the year. At Virgin, the service is available on a half dozen aircraft with 13 more slated to follow by mid-summer.

Others "Interested"

Another "seven to 10" airlines have shown serious interest in Tenzing, McGinnis said, though that list does not include two former Tenzing trial customers -- Scandinavian SAS and Air Canada.

SAS last year signed with Connexion for a trial beginning in 2004, joining Deutsche Lufthansa, British Airways and Japan Airlines as Connexion clients.

Air Canada, which says it got positive feedback from the 500 passengers who tried Tenzing in 2001, scrapped the service to keep its costs down and focus on no-frills service.

Connexion also suffered when airlines went into survival mode, losing a deal with the top three U.S. airlines to invest in the venture and install the service on their aircraft and slashing staff.

Unlike Connexion, which claims business travelers as its primary market, Tenzing also sees its e-mail offering selling well among leisure travelers.

If all goes according to plan, Tenzing expects to post a profit in two years or less, even if it snares a tiny fraction of the hundreds of millions of airline passengers.

FMI: www.tenzing.com