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What many don’t know about the big JetBlue sale of its LiveTV to Thales in March of this year, which earned the airline $400M, is that it’s actually been a complex IFE (in-flight entertainment) hot potato tossing contest from the beginning, aimed at ensuring that the technology would not fail before it had a chance to take off.
This is an excerpt from our latest Global Trends Report “The Rapid Ascent of In-Flight Entertainment,” which examines what’s coming next for onboard movies, television, games, and connectivity.
LiveTV came about as part of a series of acquisitions and sales of AirVision technology, which debuted in the 1980s.
BE Aerospace, the leading aircraft seating manufacturer, first acquired the technology from Phillips seeing the future potential of it, then effectively rebranded and deployed in a joint with Harris Corporation in 1998. Later, BE Aerospace sold its shares in LiveTV to Thales.
In 2002, JetBlue bought out LiveTV, a move which served not only to diversify JetBlue’s holdings, but also served to keep the service going through hard times in the industry following the 9/11 attacks. It was a visionary move; as the firm (through all its evolutions) has always been one step ahead with the next great development.
When the sale was announced in 2002, Glenn Latta, executive vice president of LiveTV had this to say:
“After ‘going steady’ for the last few years, the marriage with JetBlue is a very exciting development. LiveTV and JetBlue share a vision of innovation. Together, we look forward to creating new ways to enhance the customer travel experience and make flying more enjoyable.”
Those words proved true.
When JetBlue sold their shares to Thales this March, it effectively recover the “carrying costs” of this technology through those difficult times. It was smart timing for handover, just when the new technological innovations from Thales are likely to revolutionize the industry again.
How revolutionary could it get? Very.
For one, the hardware and interface advancements Thales is making with their products and the associated services may ultimately put Virgin America’s own innovative product offerings to shame.
There has also been a push for Global LiveTV services which suffered from start-stops due to issues of adequate bandwidth and satellite coverage, but which LiveTV has now effectively deployed.
Then there’s the connectivity conundrum. JetBlue’s Fly-Fi service is powered by ViaSat which is also a LiveTV connectivity partner. LiveTV is in talks with Zodiac about powering their IFE systems with connectivity. This year, at the Aircraft Interiors Expo in Hamburg, Thales announced that it has also become an official reseller of Inmarsat’s Global Xpress (GX) connectivity services.
At first, this may appear to put Thales at odds with JetBlue, but one must remember the connections. In fact, the connection between these two points is so obscure that many in the industry, even ourselves, did not adequately comprehend the game plan at the time of the announcement.
In effect, if all goes as planned, Thales can become a bridge between ViaSat and Inmarsat. Gaining from service flexibility and coverage from both, and earning revenue from resale of these services to their direct competitors. One can only assume that part of that revenue will be applied to further developments in the IFE hardware technology when Thales capitalizes on the revenue from all that connectivity.
Did we mention that Thales makes communications satellites?
For their part, JetBlue has benefited greatly from the positive response from their customers to LiveTV, during the lean years when such services were inconceivable to most carriers. It will also benefit from Fly-Fi, even more than it has already.
JetBlue saved IFE, and IFE saved JetBlue.
LiveTV helped cement the JetBlue brand as something special and something different in the air. Fly-Fi seals the deal with customers. JetBlue will provide these services in years to come, without carrying the operating costs. To their passengers, all this hot potato toss is invisible. The passenger experience thus far has been unaffected, and, if anything stands to improve considerably. When Thales take their developments to the next level, JetBlue and other key airline customers, like United, and Virgin Australia, have a lot to gain.
The first four pages of the 31-page report, including the Executive Summary and Table of Contents, are embedded below: