Thales To Buy JetBlue's LiveTV Unit For $400 Million

JetBlue Airways (NASDAQ:JBLU) agreed to sell its in-flight television business LiveTV to Thales Avionics on Thursday for $400 million, an effort to cut costs.

The all-cash deal is expected to close in mid-2014, subject to certain regulatory approvals.

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JetBlue will then enter into long-term agreements with LiveTV to support its inflight entertainment and connectivity.

“We believe JetBlue will benefit from reduced operating costs and capital expenditures related to running LiveTV as a subsidiary,” JetBlue finance head Mark Powers said in a statement.

Shares of JetBlue were up more than 3% to $9.02 in recent trade.

LiveTV provides in-flight entertainment and connectivity systems for commercial airlines. For 2014, it is anticipating more than $150 million in revenue.

The subsidiary, which employs some 450 people, has already helped drive industry-wide improvements to in-flight entertainment and Internet access on commercial flights.

France-based Thales is Europe's largest defense electronics company.

CEO Jean-Bernard Lévy said the company's aim is to "offer the highest performance and most competitive and flexible connectivity solution to airlines regardless of their fleet-size, aircraft type or route structure."

“Airlines want to enable their passengers to have access to this connected environment within the aircraft,” he said.