Profile: Bernhardt Seiter, Director, Product Competence Center, Deutsche Lufthansa AG

Germany’s Lufthansa airlines says its first year of offering wireless broadband Internet links to commercial passengers has confirmed its forecasts that the service would appeal to business travelers.

Officials at Lufthansa and Connexion by Boeing, a unit of Chicago-based Boeing Co., both took a leap into the unknown in early 2004 when they agreed to outfit Lufthansa’s long-haul fleet with Connexion’s in-flight, satellite-delivered broadband service. After an introductory period when passengers were offered free access, the paid service started in May 2004.

For Lufthansa’s Bernhardt Seiter, early results have confirmed the company’s belief that wireless broadband links would appeal first to business travelers, especially on daytime flights from Europe to the United States. But U.S.-to-Europe nighttime flights also have attracted customers, he said.

For Seiter and Lufthansa, the goal now is to embed Connexion’s satellite links into the airline’s seat-back video screens to appeal to a wider market, including children looking for online games. Seiter spoke to Space News Paris bureau chief Peter B. de Selding.

You have tested Connexion commercially now on your long-haul fleet and have 42 aircraft equipped for the service. What are the plans for expansion?

We expect that by the end of 2006, all 78 of our long-haul aircraft will be Connexion-equipped. We take advantage of scheduled downtimes for the aircraft to install Connexion hardware at the same time as we are doing other upgrades and maintenance to the aircraft.

Are customers starting to make flight or airline choices based on Connexion availability, or is it too soon to know?

What we see from our surveys is that in the special markets we use Connexion, our corporate customers say it is an important addition to our service. And we have seen that on our night flights across the Atlantic, usage rates have been twice as high as we had forecast.

Is there a direct correlation between the length of the flight and the use of Connexion?

Yes, the longer the flight, the higher the usage level. Flights between Europe and the West Coast of the United States have higher usage than flights to the East Coast. But even in a three-hour flight to the Middle East, for example, there is enough time to surf the Web for 30-45 minutes, much as you would do at a “hot spot” for wireless Internet access at an airport lounge, for example. It really depends on the application.

What is the average user time per flight?

The average user time for all flights combined is between two and two-and-one-half hours, with a high variation depending on the flight. We also see people who go directly onto the Internet and agree to pay for the service, and people who surf the Lufthansa Internet portal, which has some news and entertainment and is free.

How does this translate into numbers of customers per flight?

We are seeing about 10 users per flight, which is what we had expected when we started. Each flight is 200-400 seats. We believe this figure will grow when the service reaches a critical mass of aircraft equipped, and as customers replace their older laptops with wireless-enabled equipment. In the long run we forecast 20-30 users per flight.

Connexion charges $29.95 for a flight of more than six hours, and even less for shorter flights, to access its service. Is price a limiting factor?

We don’t see price as a limiting factor. Connexion bills in U.S. dollars so that dollar-euro exchange rate has not been a problem for us. We have seen some difficulties people have in accessing the Web from their corporate intranets, but this is the same problem they would have at any other wireless access point.

How much knowledge do you have about what people are looking at on the Web and how many people use the service per flight?

We don’t have an exact idea of the numbers of people, only the amount of traffic that occurs in the system. Someone taking out his laptop and using the service through a wireless link on the plane does not inform the crew systematically, so there is no way to determine how many people, in what section of the plane, etc. What we do know is that the use so far is primarily business travelers, wherever they are in the plane.

What plans do you have to expand the service to get more gamers or other types of users?

Our target is to integrate the Connexion service with our in-flight entertainment system, so that you access the Internet or our Lufthansa Internet portal from the screen at your seat. We think this will help draw in people who don’t have wireless-capable laptops with them in the cabin, particularly younger people who want to surf the Web for entertainment.

What about offering live television through Connexion, as Singapore Airlines has decided to do?

We are watching this carefully and are in discussions with partners about this. But our view is that the market is not mature enough yet. Live TV via laptop is not yet a service our passengers are looking for. It becomes more interesting when live TV is integrated into our in-flight entertainment system.

What is the status of offering an onboard telephone service through Connexion?

This of course already is available for customers with voice-over-IP (Internet Protocol) equipment, and we are looking at ways to expand it. Technically it is not a big deal, but airlines need to define a common policy. We need to do more research into how much demand there is for this that is not covered by broadband access to e-mail.