AirCell soars to new sales after bumpy takeoff

LOUISVILLE ? It all started with one man’s innovative scribbles on a napkin at a Texas restaurant. From these humble beginnings came AirCell, a seller of cellular phones and modems for airplanes that is now soaring to new heights.

The man who invented AirCell, Jimmy Ray, still is on the company’s board of directors, said Jim Stinehelfer, president and chief executive officer of Louisville-based AirCell. “He is a consummate entrepreneur. He has about 85 patents.”

The year was 1991, and Ray and three others were sitting at a barbecue restaurant in Dennison, Texas, talking about airplanes and telephones, Stinehelfer said. “Jimmy started making sketches on a paper napkin of how cellular-style phones could be used in airplanes,´ said Geoffrey Hoppe, the company’s vice president of sales and marketing.

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AirCell had a bumpy takeoff in late 1991, when the Federal Communications Commission would not allow it to install radio frequencies for the phones, according to the company’s Web site. In 1995, AirCell partnered with General Electric to develop the system. In 1995, hundreds of test hours were flown in Texas.

The company was getting off the ground, but more funding was needed to continue development. AirCell was able to get seed financing from Boulder’s Becker Capital Management, and by 1996, almost 40 AirCell systems were installed and operating on business jets and private aircraft.

At the beginning of 2000, AirCell had 65 network sites. During the year, it added 50 more sites, or approximately one per week. Now, more than 85 percent of in-flight routes in the United States are covered.

There are networks in all 50 states, Stinehelfer said. “Nine out of 10 times, when you reach out and pick up our phone, you’ll be able to make a call,” he said. This year, the company plans to fill in the few holes left in the system.

AirCell sold 600 units for private aircraft last year, Stinehelfer said. Recently, it was selected to be in most new aircraft for major airlines, a sizable account considering 500 jets are made in the United States each year.

AirCell also has been approached recently by major airlines to provide their aircraft phones. Other AirCell customers include groups of people who go in together to purchase jets, Stinehelfer said.

The company expects to become profitable late this year, he said, and to sell more than twice the number of phones it did last year. Although many jets now have phones by other companies such as AT&T or Airphone, these units can be prohibitive for smaller aircraft owners because they cost approximately $100,000. The AirCell system, by comparison, costs $10,000.

In addition to expanding its networking range, AirCell recently began offering a modem to go along with its phones, Stinehelfer said. This device allows passengers to connect their AirCell phones to personal computers and check their e-mail or fax. It also allows pilots to access weather information.

“Today’s general aviation customers can rarely afford to be out of touch with typical office functions such as phone, fax and e-mail,” Stinehelfer said. “This new card helps eliminate those limitations and allows our customers to benefit from the many advantages of in-flight cellular communications.”

The new modem retails for $249.95, according to AirCell’s Web site.