Now that the U.S. is in place, Aircell is planning a rollout of its services early in 2014 over portions of Canada. The rollout, expected in the first quarter, will enable travel between U.S. and portions of Canada with uninterrupted Internet access. The Canadian coverage initially runs coast to coast along the southern portions of the country and up the western coast linking to Alaska. Many of the most populous regions will be covered.
As Aircell expands its reach into Canada and grows its customer base there, the company is also enlarging its service options and customer base through the recent acquisition of the Airfone business unit from LiveTV. The purchase, completed in April, included LiveTV’s 1 MHz air-to-ground spectrum license, as well as the Airfone inflight communications service and network infrastructure.
Wade says a primary reason for the buy is that Airfone operated on frequencies adjacent to Aircell’s own spectrum slice. Having that piece will enable Aircell to expand its capabilities and services, although Wade wasn’t yet ready to discuss any new offerings as a result.
Another factor in that acquisition is the fact that nearly 1,000 customers were equipped with MagnaStar units that relied on Airfone service. Aircell plans to discontinue the Airfone service at the end of the year, meaning those customers must look for other options for equipment and service. Aircell has been offering incentives for those customers to move over to its own service, and many have opted for it. “The vast majority see incredible value in making the transition,” Wade says.
But others have adopted a wait-and-see attitude, since the Airfone service has been under threat of shutdown before. Aircell has been trying to get the message across that the cutoff date is a hard deadline, and warning to avoid a backlog at installation shops. “It is not a trivial install,” he says of the equipment switch.
As those customers switch over, Aircell’s customer base continues to grow, and so does its sustained linear growth. By June, the number of aircraft equipped for the air-to-ground broadband service had grown to 1,684, up 44% from a year earlier. And its second-quarter report, released Aug. 7, showed a 55% increase in business aviation service revenue overall.
Wade is satisfied that the company is well positioned for the future, particularly since it just completed a long-planned initial public offering in June. That move provides Aircell with access to new capital resources for its growth initiatives, although Wade says the pieces are in place for its current growth plans.