This morning Guestlogix announced that BA has begun to deploy its onboard retailing platform on 245 planes serving approximately 33 million passengers annually. Although terms were undisclosed, most multi-year agreements to date have ranged between three and five years, and this contract likely falls into that range with typical monthly minimum revenue guarantees.
BA should be considered a reference European account that can help to validate the solution to other major carriers in the region. In order to win this contract, GXI has worked hard over the past several months with BA to obtain PCI PED 2.0 certification for its handheld devices. This certification should help to align the solution to banks and credit card companies, which should help GXI to secure more potential European deals in coming months.
The 33 million passengers have been previously accounted for in the company's Q1 disclosure of 824 million passenger trips under contract. According Management, the company is currently generating revenue from the contract. Once switched on, GXI benefits immediately from all current inflight transactions by recognizing percentage-based fees. British Airways generates significantly more revenue per passenger than its North American counterparts, which typically generate about $0.5 per passenger in onboard transaction revenue. As a result, transaction revenue could exceed monthly minimum guarantees quickly.
Analysts are likely to have included the BA revenue streams in recent forecasts, so it is unlikely that estimates or targets would be adjusted upward as a result of this deployment. However, these revenue streams help to de-risk forecasts, and continue to provide evidence that execution continues on track.
Disclosure: I do not own shares of GXI or BA