An Irish research company, National Avionics, is developing new technology which will allow in-flight bank ATM transactions from next year. This follows its agreement to purchase the assets of In-flight ATI Incorporated, a California-based company, which developed the prototype ATM for passenger use on board aircraft.
National Avionics is providing the core communications technology via its satellite systems to facilitate the transactions. It is also raising money to float a spin-off company on the EASDAQ.
Senior management at both companies will merge to create InFlight ATI, but will keep National Avionics as a separate entity.
The management hopes to float 30 per cent of the new company early next year, to raise £7.5 million sterling for working capital. If successful this would value the company at around £24 million. Executives have spent this week talking to prospective financial advisers. The operation and administration of In-Flight ATI will be based in Dublin, where it is expected 50 people will be employed. A wholly-owned subsidiary operating out of California, will employ a further 25 people in systems integration activities.
By extending credit card validation to the air, the international travelling public will be able to avail of a range of services. Those likely to be most popular include exchanges of paper money from one currency to another, and credit, debit and bank ATM card exchanges into foreign paper money.
The ATMs also have the facility to dispense various stored-value products, such as pre-paid international telephone cards or travellers cheques, and special purpose debit cards storing electronic cash which might be used for in-flight entertainment and gambling systems.
In-Flight ATI's revenue will come from ongoing service commissions and royalties from participating airlines. The company expects to announce a European airline as its first ATM carrier in the next couple of weeks, though the technology is not expected to be available to passengers until the last quarter of 1999.
The facility will also have implications for in-flight duty-free transactions as it eliminates costs previously incurred by declined transactions in the absence of a validation process.
A specially tailored device storing details of duty-free inventory, prices and exchange rates with a wireless link to a database aboard the aircraft, will relay information via satellite to ground-based banking services.
The credit card validation process - routed from In-Flight ATI's central servers - is expected to take under a minute. The duty-free device is already under contract with Cathay Pacific. The company is also at an advanced stage in talks for a contract with Emirates Airlines.
The technology facilitates the online validation of the credit card PIN and authorisation procedures through SITA, the largest private satellite communications network owned by the airlines. This is the first time the data communications service has been used for commercial purposes, and it is based on a new Data-3 protocol developed by International Marine Satellites.
"The key to this technology is the provision of secure end-to-end transactions from the air to ground-based financial services networks. It is secure, reliable and global, and the service aims to charge similar rates to passengers as bureau de change facilities found in any airport," said Mr Kevin Kelly, business director of National Avionics.
The core facilitating technologies have been developed by National Avionics through involvement with the European Space Agency, with support from the office of Science and Technology and Enterprise Ireland. This is National Avionics third spin-off company from its research activities. Its two affiliate companies, Appian Traffic Technologies and ATN Aertel, are quoted on the London-based OFEX stock market. They raised £3 million and £6 million respectively in advance of their flotations.
According to Mr Derek Kelly, corporate consultant at National Avionics: "Ireland has managed to some degree to buck a trend, where we now have international companies looking to Ireland for their technology solutions. National Avionics has always been involved in providing these products, and with this latest development we can offer the airline passenger completely secure inflight transactions."
