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Sold! JetBlue Sells LiveTV to Thales

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Sold! JetBlue Sells LiveTV to Thales

Sold! JetBlue Sells LiveTV to Thales
March 13
14:41 2014

MIAMI — JetBlue announced that it would be selling off its LiveTV LLC subsidiary to French electronics company Thales. The sale, for $400 million, still requires regulatory approval.

(Credits: Author)

(Credits: JetBlue)

The carrier had been looking to dump LiveTV, which it owned, for several years in a bid to cut costs and focus on the core business of running the airline.

According to SEC records, JetBlue purchased LiveTV in 2002. The company produces seat-back satellite TV, XM Satellite Radio, and movies via on board equipment. It provides services to multiple airlines including parent company JetBlue, Froniter, and Virgin Australia.

For JetBlue, the product, with content provided by DirectTV, went to become one of the featured perks of the populist airline. Passengers flocked to the carrier in part because of the ability to watch up to forty channels of live television including favorites such as the major networks, ESPN, and Comedy Central while other carriers pared back free inflight perks in the early to mid part of the last decade.

But don’t worry, DirectTV isn’t being dumped from the fleet because of the sale. Once the sale is complete the carrier says it will enter into “long-term agreements” with LiveTV/Thales to “continue providing support for [our] live TV and inflight connectivity product, Fly-Fi.”

As per JetBlue’s 2013 annual report, as of December 31st, 2013, LiveTV has firm commitments to install in-flight entertainment services on 196 additional aircraft through the end of 2015, with additional purchase options for installation on 9 aircraft in 2016. Beyond 2016, JetBlue is scheduled to take delivery of at least 100 new aircraft consisting of 28 Airbus A321s, 3 Airbus A320s, 30 Airbus A321neos, 30 Airbus A320neos, and 21 Embraer E190s that many expect to be converted into orders for the re-engined E190 E2. Presumably, JetBlue’s forward contracts with LiveTV cover these firm deliveries.

In 2013, LiveTV earned $72 million in revenue versus $81 million in 2012 and $82 million in 2011. The recent decline in revenues comes after a steady rise from $6 million in 2004 to $82 million in 2011 (see chart below). While JetBlue does not break down segment results for LiveTV, the carrier’s 10K also notes that component supply purchases for 2014 totaled $45 million. Given that the cost of labor and installation is significantly less than that of the components, it is likely that LiveTV either broke even or made a slight net loss in 2013.

(Credits:  JetBlue Airways SEC Filings)

(Credits: JetBlue Airways SEC Filings)

The sale will expand Thales’ already impressive portfolio in the realm of inflight entertainment (IFE).  It currently produces a number of IFE options, including its popular TopSeries system.

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A Global Review of Commercial Flight since 1994: the leading Commercial Aviation publication in North America and 35 nations worldwide. Based in Miami, Florida.

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