Global Eagle makes $430-million airline entertainment deal
Two entertainment industry executives announced plans to acquire two companies in a $430-million transaction aimed at capitalizing on the growing consumer demand for in-flight services.
Global Eagle Acquisitions said it has reached an agreement to buy privately held Row 44 Inc., a Westlake Village company that provides satellite broadband service for Southwest Airlines, the nation’s largest domestic carrier. It also agreed to acquire 86% of the outstanding shares of Advanced Inflight Alliance, a German company that supplies games, movies, general entertainment and applications to more than 130 airlines worldwide. The all-stock deal is subject to regulatory approval.
“This is exactly the kind of worldwide digital media opportunity we’ve been seeking for Global Eagle since our initial public offering,” said Harry Sloan, Global Eagle’s chairman and chief executive.
Sloan, the former chairman and chief executive of Metro-Goldwyn-Meyer, and co-founder Jeff Sagansky, a former executive at CBS and Sony, see opportunity in the skies. Only about 1,800 planes out of a global commercial aircraft fleet of 13,000 offer Internet access. Some 3.1 billion passengers — many carrying laptops, tablets and other portable devices — represent a captive audience, eager for Internet-delivered diversions.
Global Eagle is betting that, by combining digital content and connectivity, the company will be well positioned to capitalize on the global airline market.
Row 44’s biggest competitor is Gogo, which provides Wi-Fi access to more than 1,600 commercial aircraft, including domestic Delta Air Lines flights, all AirTran Airways and Virgin America flights, and select Air Canada, Alaska Airlines, American Airlines, Frontier Airlines, United Airlines and US Airways flights. Row 44 uses satellite technology, which it believes provides faster and more dependable Internet access than signals sent from ground towers.
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