US low fares carrier JetBlue Airways has secured enough capital to avoid a secondary share offering and acquire in-flight television service provider LiveTV.
The New York-based A320 operator posted a monthly load factor of 90.5% for August, becoming what is believed to be the first US carrier to surpass the 90% mark. With almost $300 million cash, JetBlue says it will not hold a secondary offering. It raised $158.4 million in its initial offering.
LiveTV, a joint venture between Thales Avionics In-Flight Systems and Harris, was formed in 1999 to provide airline passengers in the USA with in-flight live broadcast television services. The service failed to take off, however, with airlines losing interest in live television and favouring e-mail/internet products instead. JetBlue is LiveTV's only customer. Alaska Airlines had expressed interest in offering the services, but failed to introduce them; Legend Airlines offered the service briefly before it collapsed; and Frontier Airlines has failed to convert a memorandum of understanding to an agreement.
JetBlue will purchase LiveTV for $81 million, including $41 million in cash and repayment of LiveTV's $40 million debt. The deal is due to be completed in the fourth quarter. Included is $30 million worth of hardware installed on JetBlue's fleet. JetBlue says the acquisition will provide direct control of "this important part of the JetBlue product", but also ensures the survival of the business. LiveTV will be a wholly-owned subsidiary.
Source: Flight International
