Global Eagle to quit maritime?
May 16, 2019
By Chris Forrester
Airline in-flight connectivity and broadband supplier Global Eagle Entertainment (GEE) says it is considering disposing of its Maritime division even though it paid $550 million for it just three years ago.
GEE has hired Barclays Capital to advise it on disposing of its non-aviation division including the Maritime portion. GEE CEO Joshua Marks says that 25 per cent of top-line revenue and 48 per cent of connectivity revenue would be affected by a sale. The division includes GEE’s presence on cruise liners.
GEE says it hopes to have more news of its position, including a decision on several offers, by this summer.
GEE reported $166.6 million in revenues for the quarter-year ending on March 31st, up 6.6 percent on a year ago. However, the Boeing 737 MAX problems are having an effect and likely to see revenue reductions in this current quarter by $3 million -$4 million and that it has 26 aircraft affected by the aircraft’s grounding.
Marks said: “The cruise business continues to be competitive. Cruise lines procure a lot of bandwidth. That said, the importance of integrating multiple satellite networks, of having redundancy, has become critically important with the recent failure of different satellites.”
On the aviation side of the business there is strong growth. Marks said that connectivity revenue expanded 12 per cent in the most recent quarter year, to $45.3 million, and had grown by 30 per cent since mid-2018.