Without question the cross-country success of Aircell's sales pitch for air-to-ground (ATG) connectivity was a highlight of 2008.
The fact that Aircell brokered agreements with several airlines at a time when doom and his friend gloom paid a visit to the industry made the Colorado-based company's achievement all the more impressive.
But one bothersome question has been repeatedly asked amongst IFE&C players and enthusiasts. How in the heck will Aircell meet its commitments to install broadband systems on so many aircraft? After all, Delta is moving fast and furious to offer Gogo fleetwide, and plans to equip merger partner Northwest's fleet.
"Where are the dollars going to come from even if the orders are there," questioned IFE&C consultant Michael Planey, noting that if Aircell is seeking basic commercial lending it may run into some problems. "Commercial lending just isn't there right now for a lot of industries but particularly the in-flight [entertainment] industry," he says.
Sources say Aircell is in the market looking for another $100 million and that major investor Ripplewood Holdings is responsible for the search but not putting the money out itself.
Rather than beat around the bush, I asked Aircell about this directly. Below is Aircell CEO Jack Blumenstein's full response. Note that the Colorado-based firm expects to see its commercial airline operations turn profitable this year!!!
"It is not necessary for Aircell to secure additional outside financing to fulfill its commitments to Delta and others. We are very pleased with the agreements that we've reached with our airline partners, which provide an attractive business case for both us and them.
"The financing steps that we completed in 2008 have positioned us for the rapid growth we will see in 2009. Indeed, we fully expect to see our commercial airline operations turn profitable in 2009, adding to the longstanding profitability of our business aviation segment.
"In these challenging capital markets, we are very fortunate to have completed our 2008 financing activities and to continue to have the ongoing support of our two major investor groups.
"Ripplewood Holdings, a major private equity firm, Blumenstein/Thorne Information Partners and other investment entities associated with investor/entrepreneur Oakleigh Thorne have 'deep pockets' and a deep commitment to the long-term success of Aircell.
"As a result of our market success, it is not surprising that we have frequently been approached by interested outside investors, and, on an ongoing basis, we continue to evaluate (but do not otherwise comment upon) whether - and when - adding further strength to our investor base will serve the interests of Aircell and its shareholders."
(Photo of Jack taken in November at Virgin America's party for the beta launch of Gogo)
on January 8, 2009 2:33 AM | Reply
i see tremendous growth in this industry. i am waiting for this company to go public and its stock options..this is right innovation at right time!
on January 12, 2009 3:57 PM | Reply
Aircell is a Chicago based company and I continue to see Colorado. I know for a fact it's in Chicagoland area, at least the wifi part of it responsible for bringing Gogo to the market.
on January 12, 2009 4:15 PM | Reply
Right you are. The company now lists its commercial activites as based in Chicago, while its Colorado offices cover the biz aviation side. Thanks!