Aircell raises $35M to fuel its in-flight Internet

February 6, 2011 9:00 PM
Anthony Ha

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Aircell the company that provides the Gogo in-flight Internet service, has raised $35 million in new funding.

In-flight Internet seems to be more and more common (or at least it’s becoming more and more central to my work life), with Aircell leading the charge. The Itasca, Ill.-headquarted company said Gogo is now available on nine of the top 11 airlines. That includes all flights by AirTran Airways, Delta Air Lines, and Virgin America, as well as some flights from Air Canada, Alaska Airlines, American Airlines, United Airlines, and US Airways. And it has plans to go live on Frontier Airlines soon.

The company has also teamed up with tech companies to offer high-profile promotions, most notably deals with Google that led to free WiFi over the last two holiday seasons. Aircell said Gogo made more than 2 million WiFi connections during the 2010 promotion. (I thought Gogo service seemed to slow dramatically during the promotion, and I’ve heard similar complaints from friends, but an Aircell spokesperson denied that performance suffered.) This month Aircell is partnering with Ford to provide free in-flight access to Facebook.

Beyond commercial airlines, the company said it offers in-flight Internet on nearly 6,000 business aircraft.

Aircell said it has raised more than $500 million in funding since it was awarded an exclusive spectrum license by the Federal Communications Commission in 2006, including $176 million raised last year. The new round came from existing investors including Ripplewood Holdings, Blumenstein/Thorne Information Partners, “other investment entities associated with investor/entrepreneur Oakleigh Thorne,” and Aircell management.

Competitors include OnAir and Row 44.

http://pulse.yahoo.com/_LMDFHENUFCOOUVC5CU7Q4UWWLU Mayor Mccheeze

So this is a sure sign of trouble at Aircell…and the facts in this story are complete BS which makes this even more troubling.1. They are $500M in debt from private equity. They raised $176M this time last year to likely pay back some of the initial investors. That new money came with a new CEO…a classic company in trouble but needs an influx of cash move. And almost 12 months later…more cash? Seems they have requirements to pay back some of the initial investors starting last year and that is where the new cash goes.2. The claim that Aircell is installed on 6000 business jets…complete BS. That would mean nearly EVERY business jet in the US would have to be outfitted with Aircell…and if that was the case, they would not be looking for money. My prediction is that Aircell is in big trouble and is facing fierce competition with new players in the commercial airline IFE business such as LiveTV offering internet and TV using Ka band satellite. This can be done on a global basis and is not restricted to the continental USA.The goal is to make it to an IPO so the initial investors get their money out from and then the stock tanks.