SEATTLE (AP) -- Airplane maker Airbus Industries is buying part of a startup company that provides in-flight Internet access, a deal that comes a day after three U.S. airlines joined a rival venture started by Boeing Co.
Airbus, Boeing's European arch rival, is acquiring a 30 percent stake in Seattle-based Tenzing Communications. The purchase price wasn't disclosed, but Thursday's announcement said the deal values Tenzing at $148 million.
Tenzing, which had previously signed up three foreign airlines for its in-flight Internet service, aims to equip 50 planes for e-mail and limited Web access by the end of this year, and about 200 by the end of next year.
That timeline would give Tenzing and Airbus a headstart on Boeing, which until Wednesday had failed to sign on any airlines for its fledgling year-old venture, Connexion by Boeing. To win its first customers, Boeing agreed to let United, Delta and American airlines become part-owners in the business.
Initially, the Connexion by Boeing service is slated for installation on 1,500 jetliners at the three airlines, with the first ones offering service in the second half of 2002.
Either way, the two alliances breathe new life into a market that has mostly foundered over the past year after a barrage of high-profile ventures were announced. Two of the most prominent, a service from AT&T and a partnership between News Corp., Qualcomm and Loral, have yet to snare any business.
Under Tenzing's service, customers would pay a flat fee of $4.95 to see e-mail headlines, and then pay 50 cents a page to read those e-mails. In addition, customers could access certain Web sites in flight for free. By contrast, Connexion's offering is expected to cost about $20 per hour.
Both services are to be delivered via satellite, though Tenzing is starting out with slower speeds to get an early jump, while Connexion plans to launch with a speedier broadband connection.
Like Tenzing, Connexion will also be marketed to other carriers. But for now, the business is shaping up as a two-player affair, with Boeing dominating the U.S. market and Tenzing taking the lead overseas.
The first airlines that will be offering Tenzing's service will be Cathay Pacific Airways, Singapore Airlines and Virgin Atlantic Airways. In addition to one Singapore aircraft, the service is being tested on five Air Canada airplanes.
John Wade, executive vice president for strategic development at Tenzing, said the small company, which employs just 150 people, wasn't daunted by Boeing's partnership with the three major U.S. airlines.
''Tenzing has been very successful internationally and will continue to be so," said Wade. ''And we also haven't given up on North America."
Wade also said Tenzing expects to announce more deals to sell its product to other airlines at the Paris Air Show, which begins Saturday.
Under the Connexion plan, special antennas aboard the planes would connect with satellites to provide Internet access. Passengers would use their own computers on board for the hookup. Connection speeds would depend on the number of passengers online at the same time.
The Tenzing plan calls for a special in-flight computer server that would update periodically, allowing passengers to send and receive e-mail and view several hundred thousand Web sites deemed most popular.
Wade said Tenzing hopes to add full Internet access through a satellite-based high-speed connection next year. He said Tenzing hadn't finalized its pricing plan for the high-speed access yet, but believes it will be cheaper than Boeing's.
The equipment first would be available to passengers on long-distance flights within the United States. ''The longer the flight, the more desire there is for the service," said Larry Deshon, United Airlines' senior vice president for marketing.
