Boeing Co. (BA) announced that it will end its in-flight Internet service, Connexion, stating the reason as the market for it hasn't progressed fast enough to warrant keeping it. The cost was $26.95 for long flights or $9.95 an hour.
The cost to shut down the service will be about $320 million. That charge works out to 26 cents a share before tax for the rest of 2006, the majority of which will come in the third quarter. Earlier, Boeing said it could take up to a $350 million charge, or about 31 cents a share.
ViaSat Inc. (VSAT) views the shutdown with disappointment since they were the exclusive provider of equipmenet for the project. Analysts estimate the project accounted for $10 million in annual revenue. The company, based in Carlsbad, Calif., had $434 million in revenue this fiscal year.
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