US Airways says IFE “on hold” due to financing difficulties

Say it ain’t so! US Airways today warned employees that IFE is “on hold” until it can raise the financing to support installations. That is NOT good news for Lumexis.

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Oh heck, here is US Airways’ exact words:

The Lumexis trial has gone mostly well but that trial will be coming to an end soon. We’re also negotiating with LiveTV, but the main issue here is financing and that is difficult to do in the economic environment we’re currently in. It costs several hundred thousand dollars per aircraft to equip seatback entertainment. We’re committed to the project, but until we can raise the financing to install, IFE is on hold.

I guess this is what happens when you wait too long to make a bold move like bringing new IFE&C onboard your aircraft. It wasn’t very long ago that LiveTV and friends were able to finance equipage. From the sounds of it, those days are gone. And now, even if US Airways wants to get on the bus, it’s efforts are being stiffled by that little thing called money or lack thereof.

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5 Responses to US Airways says IFE “on hold” due to financing difficulties

  1. alloycowboy April 24, 2009 at 3:50 am #

    Hey Mary,

    Here is a question for you. If you were the CEO of an airline and you were thinking of installing internet connectivity would you want to be first inline, last in line or some where in the middle of those airlines installing connectivity?

  2. Mary Kirby April 24, 2009 at 7:14 am #

    I’d aim for somewhere in the middle of the pack, but I’d make sure I’m adopting a system that is scalable. Here’s why. Being a first mover can have its advantages but it’s also risky. And, judging from the IFE&C let-downs of the past – Connexion, etc – it makes sense to initially take a wait and see approach. However, once a system has proved out – and its supplier has a solid and realistic plan for easily upgrading the offering as time and technology marches on – it makes absolute sense to adopt. Now throw in another factor – the fact that suppliers like LiveTV and Aircell were initially willing to finance installs in exchange for money on the back-end. Apart from aircraft downtime, what does a carrier have to lose? Even if the supplier goes belly up, someone will rush to fill the void. I’m hearing that Continental’s LTV3-equipped 737 is seeing significant usage numbers (over 50% on some flights). People can chat about simply wanting a comfy seat to read a book all they want. Slap a live television screen with 80 channels in front of them and see what they do.

  3. Ludwig von Hapsburg XII "Stinky" April 24, 2009 at 10:00 am #

    If I were CEO of an airline, I would…

    A) Eat all my meals under my desk
    B) Have a bottle of rotgut tequila in my drawer
    C) Have an extrememly poor sense of self worth
    D) Drive my truck off a ravine (applies only if you work for United)
    E) All the above

    If you answered “E” then you may as well start on cigarettes as well.


  4. djmaven April 24, 2009 at 10:01 am #

    Undoubtedly being first in line has riska but they are relatively limited since you will never proceeed to plane no. 2 if plane no.1 is not working perfectly. On the other hand being first has extraordinary PR value and you are sure to get the best deal ever Iinclusing an indefinite commitment to “best price”)- to land a first customer, any operator will give an arm, a leg, and a bit more.

  5. Wandering Aramean April 28, 2009 at 4:56 pm #

    My guess is that LiveTV is less willing to finance the equipment for US Air because they are concerned about the long-term viability of the carrier. Plus that approach requires that the carrier actually forgo the vast majority of the revenue from the system as Continental has chosen to do. If LiveTV wanted to get the gear into the US planes they could. I’m guessing that they don’t want the risk more than anything else.

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