Lumexis lands $15M from investors

Lumexis Corp. is hoping to turn the friendly skies into a well-connected, entertaining place to spend time.

Costa Mesa, Calif.-based Lumexis earlier this month raised $15 million from investors to continue its quest to upgrade in-flight entertainment. If successful, the TV-like product would provide passengers the ability to watch movies-on-demand, listen to music, play video games and order in-flight food and drinks. It would also give passengers the option to shop from airline catalogues

Perseus and returning investors Zone Ventures and PAR Capital Management, participated in the recent round of funding.

This is the third major round of funding for the company, says Dave Davis, senior managing director of Perseus. In addition to the $15 million that the investors have already committed, there is an option to raise another $7.5 million, according to the company.

Lumexis also said it has been awarded a large order for its systems on a new customer’s fleet of 737 aircraft. Davis says that the company would look for additional investors to support growth if the company landed another huge order.

Davis says that unlike traditional in-flight-entertainment systems, Lumexis uses central servers and connects directly to screens through fiber optics cables. The centralized systems weigh less than current TV modules and Davis says the product also provides better bandwidth and is easier to upgrade. The technology is versatile as airlines can use it to retrofit older aircraft, he says.

In 2008, the company test drove the device in one US Airways plane through 300 flights, Davis says. The airline was interested in purchasing the product until rising oil prices caused it to opt out, says Davis, who was previously CFO of Northwest Airlines until he joined Perseus last year.

Because of the economic downturn and rising oil prices, “the age is over when airlines try to wile the customer with in-flight-food and entertainment,” says Joseph Schwieterman, a transportation expert and professor at DePaul University.

Schwieterman says he sees no marketing advantage for airlines to promote new in-flight-entertainment. After all, Southwest Airlines does not provide in-flight-entertainment, he says, and no customers complain about that.

However, Davis points out that JetBlue and other airlines have in-flight entertainment systems that are part of the appeal of flying those airlines.

“We believe there is plenty of room for embedded entertainment systems as well as carry-on entertainment devices,” Davis says.

Indeed, Schwieterman is presently conducting a study on the rise of passengers using MP3 players and laptops for entertainment or business purposes. He admits this provides relief to the airlines that find supplying food, entertainment and baggage services too expensive. —Martha Sanchez-Avila