As Global Eagle finalizes its financial plans for emergence from Chapter 11 Bankruptcy protection there are plenty of questions about what the future of the company will look like. Fortunately the most critical issue is easy to answer: The Albatross test aircraft remains part of the operation. Beyond that, however, the company sees the current industry crisis as an opportunity to reinvent what the inflight connectivity and entertainment business looks like.
For companies across the IFEC space you need flexibility in this environment. Any company that has a high leverage ratio is is going to be handicapped in 2021 as airlines start to think about coming back. So our goal has been to focus on getting the company out [of Ch11] around the end of the year, with a clean balance sheet with new liquidity, so that we have that flexibility that we need next year.
– Global Eagle CEO Josh Marks
For now Global Eagle is, like the rest of the industry, shuffling along. Flight levels are low. Passenger counts are low. Demand on the content side, in particular, is low. President Per Noren notes that in response “we started COVID packages that we put together that were lower in cost and didn’t have to follow the cycle timing” on the content side, making sure that the offerings remain available, but at a level the airlines can afford. Moreover, inflight connectivity “has shown up to be not nice to have but crucial to have” for the airlines during this lull.
Noren sees Global Eagles role not just as a supplier, but as as an “advisor and a lever for our airline customers to use to keep the business going and do it in a cost effective and qualitative way.” And that will lead to a company that looks and operates differently coming out of the pandemic.
A connectivity tailwind
CEO Josh Marks sees the company’s inflight connectivity segment as a tailwind, helping support the operations, rather than draining financial resources away. For an industry that has burned hundreds of millions of dollars over the years such success might be hard to believe. But the company believes its independent, flexible positioning gives it a leg up on the owner-operator companies such as Inmarsat, Viasat, and soon Intelsat.
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