JetBlue takes another look at possible LiveTV sale


JetBlue Airways appears to once again be considering a possible spin-off or sale of its LiveTV subsidiary, saying it is considering “strategic options” that would benefit shareholders.

During an earnings conference call yesterday to announce a record $47 million fourth-quarter net profit, JetBlue management was queried by analysts about the best way to unlock value from LiveTV, which provides Ka-band satellite-supported inflight connectivity to JetBlue and other airlines, as well as Ku-band supported live television.

Company executive VP and CFO Mark Powers said, “By the way, the whole notion that other airlines are adopting this product is not bad news, particularly from the LiveTV perspective…if you’ve not had the opportunity to fly Ka, we urge you to do so. It is a knockout.

“Connectivity is just such an important product for us. But to that point, as you think about LiveTV, the inflight entertainment and now obviously the connectivity aspects are core to the JetBlue brand. But you don’t need actually own the company to maintain that the ability to retain that core aspect. And so, we will continue to look at, as we move forward, strategic options that are obviously in the best interest of, amongst others, our shareholders.

“So there we are. It’s great. I can’t say how excited I am that we have that product now up in the air, that we have 10 airplanes and 15 per month being modified with that connectivity. It’s an absolute knockout.”

JetBlue in the past has bandied about the idea of spinning off its LiveTV subsidiary. In 2008, the carrier said it was open to opportunities, but it later opted to keep the Melbourne, Florida-based company under its wing, though analysts generally ask management once per quarter (during the carrier’s earnings conference calls) if they’ve reconsidered their stance.

On the heels of LiveTV’s announcement that it is the first inflight connectivity provider to successfully meet the FAA’s more stringent requirements for bird strike testing of large radomes (its A320 STC is in the clear, and it expects approvals for the 737 and 757) – and in light of the fact that LiveTV has installed Ka-band connectivity on 10 JetBlue aircraft, secured United and Aer Lingus as customers and is expected to make announcements concerning other European customers soon – once can understand why analysts are curious if JetBlue would reconsider a sale.

With specific regard to the bird strike announcement, IFEC analyst Michael Planey said, “It certainly gives them a leg up on their competitors in the short term but I expect all of the competitors to catch back up within 12 months so it doesn’t dramatically change the overall value of the business.”