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JBLU Sells DirectTv

Ex737Driver

Contract 2020????
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Knew they owned it but had it become more of a hassle than it was worth? When we had a DirectTv write-up, it was usually MEL'D until a hub where there were dedicated DirectTv reps to work the issue, upgrade, and switch components. Wonder if Thales will run it the same way? Wonder what JBLU paid for it to begin with.



http://www.businessweek.com/article...ing-something-everyone-wants?campaign_id=yhoo


Something Everyone Wants
By Justin Bachman March 13, 2014



The live satellite television on JetBlue?s flights has long been a point of pride and distinction for the airline. Few passengers knew that JetBlue Airways (JBLU) owned the company, LiveTV, that made it possible to watch Desperate Housewives at 30,000 feet, and now the subsidiary is installing a new generation of fast Internet access for airlines around the world.

JetBlue sold LiveTV to the French aerospace company Thales (HO:FP) on Thursday for $400 million, a roughly five fold return on what it paid for the company 12 years ago. The business of in-flight entertainment was a bit too far afield from running an airline, and JetBlue was planning to invest $75 million in the unit this year?money it certainly wanted to spend elsewhere.

The change in ownership could also bring a boost to LiveTV. Many airlines would never buy the service from JetBlue, ?because you?re kind of subsidizing your competitor,? says Cowen Group (COWN) analyst Helane Becker. Under Thales, LiveTV will continue to equip and service JetBlue?s fleet, according to JetBlue spokesman Morgan Johnston. ?It?s not core to our business,? he says, and will be ?better provisioned? under a new owner. The airline has said for more than two years that it was planning to divest the business.

STORY: Why Do Airlines Keep ?Black Box? Flight Data Trapped on Planes?
Still, it?s worth wondering if the price is low considering that LiveTV?s sales may reach $150 million this year, as Becker wrote today in a client note. The unit had revenue of $72 million last year and $81 million in 2012. Becker predicts JetBlue will use the sale cash to fund its new airplane deliveries.

LiveTV, which is based in Melbourne, Fla., has installed its television product on airlines including United (UAL), WestJet (WJA), Frontier, Alitalia, and Azul, the Brazilian carrier run by former JetBlue Chief Executive Officer and founder David Neeleman. United and JetBlue are also using the company?s Wi-Fi service. LiveTV has installed its equipment on 461 airplanes as of Dec. 31. It has firm orders for 196 more aircraft through 2015.
 

Flyby1206

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enuff
Paid $41mil cash and assumed $40 mil debt with the purchase. Not a bad return on that investment
 

BILL LUMBERG

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More money for pilot raises!!!
 

crash312

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10K?
They also installed a bunch on the UAL fleet for free with the ROI coming from a percentage of the card swipe. I think it cost them $300 million for the install, not sure how much of that they've made back or if UAL even still has them in their planes.

Kind of like the "free install and equipment? from Dish or DirectTV
 

Ex737Driver

Contract 2020????
Joined
Aug 14, 2004
Posts
1,240
Total Time
15000+
They also installed a bunch on the UAL fleet for free with the ROI coming from a percentage of the card swipe. I think it cost them $300 million for the install, not sure how much of that they've made back or if UAL even still has them in their planes.

Kind of like the "free install and equipment? from Dish or DirectTV

We paid nothing for the install, equipment, or upkeep. JBLU kept ALL revenue from the TV purchases. The only time UAL is on the hook to JBLU is when we comp TV for delays over 90 minutes. All UAL 737's have DirectTv installed.
 
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