February 11, 2005 – GENERAL Dynamics has sold its Airborne Electronic Systems (AES) division, responsible for the YES! handheld IFE and Empower in-seat power systems, to US aircraft electronics and lighting manufacturer Astronics Corporation.

Announcing the move last week, New York State-based Astronics said that acquiring the GD unit would broaden its customer base, extend its commercial-aircraft product line, and benefit its lighting business by adding power-generation and distribution technologies. Astronics paid $13.0 million in cash, plus a possible further payment of up to $4.0 million based on AES performance this year.

With net assets of $18 million and a $45 million backlog, Redmond, Washington-based AES lost money on sales of $25 million last year. “AES was heavily affected by the post-9/11 difficulties in the commercial airline market,” Astronics CEO Peter Gundermann said last week. “During that time they made significant investments in innovative technology and we believe that their efforts should result in solid growth in the near future. We expect AES to bring in around $30 million in revenue this year while contributing solidly to our earnings.”

Astronics plans to call its new acquisition Astronics Advanced Electrical Systems, or Astronics AES. The business will continue to operate in Redmond under its existing management team. According to Mark Peabody, VP at Redmond, there are no plans for relocation, job losses or major product changes.

The purchase gives Astronics a position in the IFE/communications market that combines a solid existing revenue stream with a new product that has yet to gain a commercial toehold.

Empower shares the market for in-seat power supplies with Airbus KID-Systeme and its SKYpower. Recent technical developments include Fusion, introduced last September and designed to supply up to 150VA (about 107W) of 110V AC/60Hz power to any one outlet in a three-seat group, and a maximum of 225VA (160W) divided among three simultaneous users.

The notoriously power-hungry range of Dell laptops requires over 100W, while other designs can operate on as little as 50W. The competing third-generation SKYpower is rated at a maximum of 100W per outlet.

Fusion is designed to operate in the “wild frequency” electrical power supply environment adopted for the Airbus A380 and Boeing 787. The manufacturer claims that at 1.8lb the in-seat unit weighs half a pound less than competing products. The system also features an RS-485 interface for integrated inflight entertainment and total cabin power management.

Less well embedded in the market is YES!, a tablet PC-based range of handheld IFE devices. So far the only sign of airline interest in YES! is last September’s Virgin Atlantic decision to trial the system in a limited number of seats aboard its Boeing 747-400s. Unconfirmed recent reports suggest that the system is working well.