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In-Flight Internet From Space Takes Off

PARIS - Panasonic Avionics Corp. iscontinuing with its ambitious program to install satellite broadband links intolong-haul commercial jets and is specifically continuing a large contract withEMS Technologies of the United States and Canada, and Starling AdvancedCommunications of Israel, to supply the Ku-band hardware, according to thethree companies.

The effort,which seeks to apply lessons learned from Boeing Co.?s abandoned Connexionprogram,?is moving more slowly than expectedbecause of the downturn in commercial air travel and slowdown in orders for new aircraft, according to DavidBruner, vice president of global communication services at Panasonic.

Bruner saida half-dozen commercial airlines have permitted the program, called exConnect,to keep moving forward out of the conviction that installingbroadband data and voice links to commercial flights is a must-havecapability. He said the airlines view the technology as being just as importantfor normal airline operations and crew-to-ground communications as it is tomeet passenger demand for in-flight Internet and wireless telephone access.

LakeForest, Calif.-based Panasonic Avionics signed a multiyear contract with EMS Technologiesof Atlanta and Ottawa?to supply exConnect antennas inOctober 2008. As part of the transaction, EMS contracted with Starling, astart-up Israeli company, to provide technology for the antennas.

Thecontracts were signed just as the extent of the current economic downturn werecoming into view. In the months since, cash-strapped airlines have jettisonedas many nonessential expenses as possible. In a Nov. 23 interview, Brunerconceded that several airlines that appeared on the verge of committing to exConnectwithheld their orders.

But 200 long-haul commercial jetsstill are being equipped, as airlines that Bruner said are not normallyconsidered industry heavyweights have stepped forward to modernize theirfleets. He said the airlines have declined to announce their plans publicly forcompetitive reasons.

?If you hadasked me nine months ago where we hoped to be, I would have mentioned aboutdouble the current figure,? Bruner said. ?Of course the global recession hashad an effect. But we have seen that our customers are still committed to it,but some are starting with the certification of one plane to give them time tointegrate the new capability into their overall operations systems.?

Bruner saidthat one of the lessons Panasonic learned from Boeing?s Connexion is thataircraft broadband needs to focus on all possible connectivity requirements toand from the jet. A major focus has been crew communications and, more broadly,airline operations for which broadband access will have the sameefficiency-generating effect as on any other business. In addition, exConnectincludes a mobile telephone service that allows passengers?to use their own telephones.

Bruner saidthe exConnect project owes a debt of gratitude to Boeing for winning regulatorysupport for commercialaeronautical broadband. ?People often underestimate the expense of aneffort like this,? Bruner said. ?It is huge, and we were able to take advantageof the fact that Boeing was there first. They set the precedent, and because ofthem, we have received regulatory approval in three-quarters of the world?snations in less than a year.?

Two principalexConnect suppliers have confirmed the continued growth in the aeronauticalbroadband sector in recent weeks.

In an April9 report to its shareholders, EMS said it is maintaining its ambitious growthforecast for 2009, despite the global economic downturn, in large part becauseof the continued strength of its products for airline connectivity. The companysaid its customers include U.S. airlines Jet Blue?and Frontier, Canada?s WestJet andAustralia?s Virgin Blue in addition to Panasonic?s exConnect.

The EMScontract with Starling is valued at up to $60 million over seven years, with aninitial guarantee of $9 million, according to Starling?s majority shareholder,Elron Electronic Industries Ltd., also of Israel.

Jacob Keret, vice president forsales at Starling, said his company ? which had no revenue to speak of in 2008and reported an operating loss of $8.4 million after a similar loss of $7million in 2007 ?is continuing research and development into Ku-band antennasystems for the aeronautical broadband market.

In an April22 interview, Keret said Starling?s patented antenna technology is using theaeronautical sector as its first and most important application but is alsomoving into land-mobile applications. The company signed two contracts withChinese customers, for a total of around $2.7 million, to provide StarlingKu-band antennas and related gear for emergency vehicles.

?Coming from the aero world, we havehad to learn to make our antennas small and lightweight,? Keret said. ?That isour big advantage.?

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