Boeing's Failed Connexion Business Venture

Here's another sad story from the inept marketing deparment files.

No less a corporate giant than Boeing is reported to be considering sale or closure of its Connexion internet venture. This is the business unit that provides the service to airlines which allows passengers to connect to the internet in flight.

According to the Wall Street Journal, in last Thursday's edition, the business is probably on Boeing's books for $1B of asset value, but may only have a market value of $150MM.

What surprised me is the marketing strategy that Boeing used for this service. At fees of $10-27/flight, on commercial carriers, it seems rather pricey for the expense budget set. Can you imagine a road warrior defending hundreds of dollars of connection fees per trip to his or her manager?

Additionally, these days, you'd think the aforementioned warrior enjoys the relatively brief period of inaccessibility. Perhaps s/he can actually use the time to think and reflect about business, rather than respond pell mell to various assaults from the laptop, blackberry and cell phone.

Apparently, Boeing belatedly decided to work with Rockwell Collins to outfit corporate (and, one assumes, time share) jets with this service. Wouldn't you think this would have been the first segment they went after? The folks who fly these planes are, by definition, seen as executives whose time is more valuable than the ones who fly commercial. One would think they could more easily, if it's even necessary, justify the Connexion fees for their trips. If it didn't "fly" with this group, it wouldn't succeed in the larger business travel community. But, if it did show promise in this more elite segment, the business would at least have bought some time to make further penetration into the business travel market.

It's astonishing that such a relatively simple business could be mismarketed and mismanaged. Especially when owned and staffed by a capable, credible, large US company of Boeing's stature.

It is understandable that not all ideas work out. But you'd think the more adventurous ones would be led and staffed by a more diligent and sensible group that knew basic market segmentation concepts, and how to implement them.