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The Flight Plan

How Norcross-based EMS Technologies is keeping you connected


by Bobby L. Hickman

June 2, 2009

If you've taken advantage of the in-flight wireless communications services being rolled out by such airlines as Delta and AirTran, you can thank a Georgia firm for making it happen: Norcross-based EMS Technologies, Inc. (NASDAQ: ELMG).

EMS provides the equipment – antennae, routes, data storage, wireless access points, software and other components – that systems integrators use to provide in-flight entertainment and connectivity solutions for aircraft around the world.

In fact, EMS was honored last month by the American-Israel Chamber of Commerce Southeast Region with the "Deal of the Year" award. EMS and Starling, a small Israel-based company, formed an alliance in 2008 to combine their respective technologies for airborne satellite antenna systems into a joint product for in-flight entertainment service providers. "The EMS-Starling broadband Ku-band antenna system supplies commercial passenger airlines with connectivity and global coverage at unprecedented speeds and quality," according to the Eagle Star Award announcement.

In accepting the award, David Smith, EMS Defense & Space general manager, said, "We're not going to stop there. We're going to modify the product mix and continue to sell to commercial airliners, business jets and military aircraft, as well as to various types of ground mobile units for troop communications in a tactical scenario." PaulDEMS

Paul Domorski, president and CEO, EMS Technologies, says the award represents just one of the many facets of airline connectivity where EMS is involved. Those include consumer services for carriers like Delta and AirTran; communications for military planes and Air Force One; and wireless solutions over satellite and terrestrial networks for the aeronautical, asset tracking, defense and mobile computing industries. "Different airline companies are taking different approaches to the market," Domorski says during an interview. "Our goal is to be the airline connectivity partner that serves the entire market segment."

EMS is benefiting from the continued adoption of in-flight connectivity by U.S. airlines – particularly Aircell's GoGo Inflight Internet service. Aircell expects to install GoGo on 1,000 aircraft this year, and EMS supplies two-thirds of Aircell's cabin wireless infrastructure. AirTran plans to deploy GoGo on all its flights by this summer, while Delta expects to expand the service to more than 300 domestic aircraft by the end of 2009, according to the airlines' Web sites. (Domorski says Delta is installing the system on six planes each night.) Aircell's Web site stated the system is also available on all Virgin America flights; on certain United and American flights; and will soon be available on Air Canada. According to its Web site, GoGo costs $7.95 for access from a Blackberry of similar device; $9.95 for laptop access for flights less than three hours; and $12.95 for more than three hours.

EMS is also working with a number of other companies aside from Aircell and Starling. EMS Formation – which EMS acquired last year to gain access to the commercial aircraft connectivity market – won a significant contracted earlier this year with LiveTV LLC. EMS Formation will provide rugged data storage for up to 1,000 aircraft that are deploying LiveTV's in-flight entertainment and connectivity systems for commercial and business airlines. EMS also provides wireless access points to Alaska Airlines and Southwest, which are beginning in-flight tests with system integrator Row 44. Outside of North America, EMS is a global supplier to such airlines as Air France, Qantas, Emirates Airline and Ryanair.

While U.S. airlines are now rushing to implement in-flight wireless, the service began several years ago, predominantly in Europe, Domorski says (pictured above). There are some 40 different airline trials now underway for systems using EMS components, he says. European and Middle Eastern airlines are more interested in entertainment services, while domestic carriers are more interested in customer Wi-Fi – a "Starbucks in the sky" – Domorski says. JetBlue also uses EMS antennae to provide live television broadcasts on their planes.

Aircraft systems provide technical hurdles: "It's challenging connecting a moving plane and satellite," Domorski says. However, the delay in implementing U.S. in-flight systems is more related to the economic challenges airlines have faced in recent years. Domorski says more airlines are embracing the technology this year, in part to generate more revenues. "It's also an opportunity for a better passenger experience," he notes. "It's a silent service that doesn't bother other passengers and allows you to stay connected - which is particularly important to the younger generation."

The growth of wireless connectivity in all sectors has helped EMS thrive. Domorski says, "The economy affects everybody to some extent but we've been fortunate to continue to grow." During the last four years, EMS reported 18 percent growth in revenues, totaling $335 million in 2008. During that same period, EMS reported compounded annual growth of 31 percent in operating income and 37 percent in earnings per share.

The company has also grown by acquisition, adding four new companies in 2008 in the United States and the United Kingdom. While no deals have been announced this year, Domorski says, EMS remains interested in bolt-on acquisitions that build on the company's expertise in connectivity and satellite tracking.  "This is speculative on my part, but by the end of the year, it wouldn't surprise me if we did one or two more deals."

Founded in 1968, EMS remains the only space-related business headquartered in Georgia. The company has 1,130 employees, of which 620 work in the state. Domorski says EMS remains "a Georgia technology company that is very much involved in Atlanta community."


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