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JetBlue to Buy Verizon Unit to Offer E-mail on Planes (Update2)

By Ville Heiskanen

June 9 (Bloomberg) -- JetBlue Airways Corp., the U.S. discount carrier, agreed to buy Verizon Communications Inc.'s Airfone business to offer e-mail and messaging services aboard planes.

The purchase lets JetBlue expand an in-flight messaging service it started testing on one plane in December and plans to add to other aircraft and carriers, the airline said in a statement today. The company didn't give a price for the deal.

JetBlue won a U.S. government auction of airwaves this month to provide Web service on flights. Airfone, which places phones in the back of seats in U.S. commercial airliners and has operated for 24 years, gives JetBlue 100 air-to-ground communications towers and more than 2,400 customers.

JetBlue was the first U.S. airline to provide seat-back televisions and live satellite programming. The New York-based company said in January that it's studying ways to allow passengers to use BlackBerry e-mail devices during flights.

Verizon Chief Executive Officer Ivan Seidenberg has been shedding businesses to focus on its wireless service and a new fiber-optic network that offers faster Internet connections and TV service. Verizon, also based in New York, is the second- largest U.S. phone company, after AT&T Inc.

JetBlue fell 7 cents, or 1.7 percent, to $3.97 at 4 p.m. New York time in Nasdaq Stock Market trading. Verizon declined 29 cents to $37.94 on the New York Stock Exchange.

To contact the reporters on this story: Ville Heiskanen in New York at vheiskanen@bloomberg.net

Last Updated: June 9, 2008 16:16 EDT

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