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IFE and Communication Industry News for May 20, 2003
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http://www.ifeinsider.com/airfax/ifexpress/ifexpress05202003.htm


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Airline Pool IFE Purchases Could Bring Havoc To The IFE Industry!

In a copyrighted article in the Seattle Times, AP business reporter Brad Foss builds a picture of a new paradigm forming in IFE purchases pooled purchases. While this subject has been around for at least five years, since airlines started alliances, there has really been a very small march toward common IFE LRUs by individual airlines. The ARINC 628 specifications are a big step in that direction, but there has always been enough wiggle room for each vendor to sell their brand of entertainment technology with few interchangeable boxes from vendor to vendor. If, however, Mr. Fosss article is correct, it foretells a change whereby multiple airlines in a group airplane purchase would begin to order identical BFE-type hardware for each plane and rely on factors like programming, seat location and LOPA differences to alter brand identity. LRUs would be common from airline to airline within the alliance. With alliance airlines buying identical planes in a group purchase, the need for common IFE hardware would probably generate a very interesting shift toward pooled content sourcing as well. However, the issue here is not just content, it is how the already strapped IFE vendors counter or react to this move. Under the pool purchase concept, a sale loss might mean hardware for 5 airline losses, not simply one. The pencils will not only have to get sharper at Matsushita, Rockwell Collins and Thales, more deals must now be cut between IFE vendors and the likes of Boeing and Airbus as they are bound by the same deal criteria (win big or loose big). This shift would also allow jet makers to become far less BFE oriented something they have tried to control by the introduction of standard catalog options. The retrofit and reconfiguration market will also take a hit, albeit later rather than sooner, as airlines within the same alliance would be able to move planes between their fleets without the necessity of a full-up reconfiguration programsbecause the specification plane will only need a minimum of cosmetic changes (programming, seat covers, logo, colored and trademarked panels and dividers etc). (Ed. Note: Mr. Foss, with all due respect, they are called galleys and lavatories.)

Airlines Team to Buy Standardized Planes
Seattle P-I


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