* Sells business to France's Thales for $400 mln
* JetBlue likely to use proceeds to fund aircraft delivery -
March 13 JetBlue Airways Corp said it
would sell its in-flight entertainment business, LiveTV, to
French defense electronics company Thales Group for
$400 million as it looks to cut costs.
JetBlue has struggled with high maintenance and repair costs
over the past few quarters. The carrier, which has 80 percent of
its operations in the U.S. Northeast, said earlier this week
that it canceled nearly 4,000 flights because of winter storms.
"We believe JetBlue will benefit from reduced operating
costs and capital expenditures related to running LiveTV as a
subsidiary," JetBlue Chief Financial Officer Mark Powers said in
New York-based JetBlue is expected to use the proceeds from
the sale to fund aircraft deliveries, analyst Helane Becker of
Cowen & Co wrote in a note to clients.
JetBlue has to take delivery of nine Airbus A321 in 2014 and
has a backlog of 136 aircraft with Airbus and Embraer
JetBlue was looking at strategic options for its
entertainment business, Powers had said on a post-earnings
conference call in January.
"You don't need to actually own the company to maintain the
ability to retain (its services)," Powers said then, referring
JetBlue said on Thursday it would sign agreements with
LiveTV to continue the service after the sale.
LiveTV, founded in 1998 in Melbourne, Florida, also counts
Frontier Airlines, AirTran, Alitalia and Virgin Blue as
JetBlue said it expects the sale to be completed in
The company's shares rose as much as 5 percent in morning
trade on the Nasdaq before giving up most of those gains to
trade nearly flat at $8.82 by midday. The stock has gained more
than a quarter of its value in the past 12 months.