Hot Topic: Surviving Hard Times: Fiscal Sanity!

With tough IFE times ahead, we have been asking industry experts for their view on what is happening and going to happen in out corner of the aviation business. This week, we were looking for some input from an expert who has been there -- been there by way of product development, engineering services, system development and content distribution. We found that person in Joe Renton.

IFEXpress: How can IFE companies remain viable at times of significant downturn -- such as now? IFEXpress put this question to Joseph Renton, chairman and CEO of The IMS Company, an IFE solutions provider and the leading provider of IFE portables.

Renton: "Many successful companies have been created, and many have thrived in challenging economic times. Economic adversity often inspires us to be more innovative -- to take chances, to look at problems and solutions differently, and try new ways of doing things. As a solutions provider, IMS is accustomed to innovating and trying new things, during both good and bad times.”

IFEXpress: An example?

Renton: "American Airlines showed unique vision in utilizing an embedded portable solution in a premium class cabin, after Alaska Airlines had demonstrated similar vision in opting for the very first portables solution in IFE. These are only two of many decisions that do, and will, shape tomorrow’s IFE solutions, not just the portables business. Our decision to leverage COTS (consumer off-the-shelf) technologies while everyone else was making big investments in proprietary products is yet another is approach to finding unique and compelling ways to apply portable technologies to the cabin, including semi-embedded approaches with portable products."

IFEXpress: So, these are challenging times, what new ideas are you trying?

Renton: "First, we will always maintain our fiscal responsibility and innovate within our means. Having said that, everyone on our team is looking at ways to apply current and leading edge technologies in more cost effective ways. For instance, how do we apply our core technologies in ways that airlines can more cost effectively deliver passenger entertainment. How do we deliver feature rich entertainment for less. In that same spirit, how can we create more cost effective and reliable content delivery mechanisms in support of airlines’ and content providers’ requirements. Finally, and this isn’t new, we are proceeding through some significant self evaluation and identifying ways to reassert our corporate basics so that we can be assured that our own house is in order. In times such as these, so long as we continue to nurture a collaborative environment, our staff has always provided us with the innovations that we need to continue our success."

IFEXpress: OK, that’s how you may behave in this environment -- what advice do you have for buyers?

Renton: "The IFE industry at times resembles the fashion industry -- buyers fall in love with the latest trends, new ideas that catch their eye, but some of which tend to not hold up very well over the passing of time -- interesting solutions that just don’t include a viable business model. Do you remember when everyone was in love with the idea that onboard gaming was going to generate enough revenues to pay for all IFE and turn a big profit? Over the years we’ve heard expectations that telephone usage, advertising, device rentals, duty free sales, and onboard sale of entertainment would fully amortize IFE, or that onboard delivery of satellite television would completely replace all other IFE. It’s particularly easy to fall in love with new ideas that come with the promise that someone else will pay for them or that they will pay for themselves. But such expectations have yet to be fulfilled. As sellers we have to be innovative and imaginative while keeping our heads -- and that’s good advice for buyers as well. Those who buy and sell solutions that are both innovative, cost effective and based in fiscal sanity will be those who likely survive in this environment."