GENEVA, Feb 15: The European company Airbus and a Geneva-based information technology firm, SITA, said on Tuesday they had set up a joint venture to make mobile telephone services available for passengers during flights.

The new system should allow passengers to use their own mobile phones and laptop wireless Internet access to communicate normally with people on the ground, possibly after 2006, the new company, On Air, said in a statement.

The system, which relies on widely used GSM technology rather than upcoming third generation mobile telephony, had undergone "successful" in flight testing by Airbus. But it will also be developed for Boeing airliners, it added.

On Air chief executive George Cooper said aircraft would effectively be turned into a mobile base station, allowing business travellers to use their phones and e-mail freely except in the takeoff and landing phase.

"Each airliner will be like a country in the sky," he said. "The price you pay should be no more than standard roaming charge in Europe," Mr Cooper added.

Aviation and telecommunications authorities were examining the system for certification, and talks were under way with several unnamed airlines to equip short and medium haul flights in Europe, On Air said.

"We estimate that the number of passengers in the addressable market for onboard GSM telephony will be over 700 million by 2009," said SITA managing director Francesco Violante.

"Meeting the communications needs of these air travellers will need to become part of an airline's passenger service offer," he added. Airlines have provided onboard air-to-ground fixed telephones on some seats at a premium charge.

The move to virtually unhampered in-flight telephony would end the airliner's status as one of the last few havens from mobile telephones. Swiss Federal Railways has made some carriages "mobile free" to offer passengers the choice of not being disturbed and Cooper admitted that might be an issue particularly on long haul flights.

"We will continue to research these issues but, in anticipation of such a need, our system will give cabin crew complete control of the system, allowing them, for example, to switch to SMS-only mode when it is 'night' in the cabin," Cooper, a former pilot, said. -AFP