IdleAire 'Under Construction'
Truckstop service promising 13,000 more spaces.
Evan Lockridge
Contributing Editor
IdleAire, the truckstop electrification/communications/entertainment service provider, has received a batch of new funding, allowing it to begin a long-delayed, but massive, expansion of its services.
In January, IdleAire announced it had sold $320 million in discount notes and warrants to institutional investors. The proceeds will allow the company to add about 13,000 IdleAire parking spaces in 210 locations in up to 35 states.
"In a nutshell, this is the funding we have been pursuing and what we really needed to put us in a solid, nationwide footprint and to provide to fleets and drivers an idling alternative," said Lynn Youngs, IdleAire executive vice-president of operations, maintenance and customer service.
IdleAire said it is immediately beginning a 15-month construction plan that calls for adding two or three locations per month at first, ramping up to around 20 new sites a month by this summer.
The project is scheduled to be finished in the late spring or early summer of 2007. Currently IdleAire has 24 fully installed locations, which offer truckers a way to heat or cool their trucks without idling, using a device that installs in the passenger side window. IdleAire also offers Internet, telephone, electrical and television service.
The company says it will focus much of its buildout at chains where it already has agreements, including, Pilot, Petro and TA, as well as with groups of independent truckstops. Those will constitute about 160 of the new locations. Another 50 or so will be at trucking company terminals.
This is not the first time IdleAire has announced big plans for achieving construction goals. In June 2004, the company hoped to have 37 locations by the end of 2004 as well as to have closed a major funding package. But the goal was missed and the funding never materialized. Last summer, company officials said they planned to have 100 locations by the end of 2005 or the first of 2006, but that target was missed, as well.
In April 2005, IdleAire announced it had received initial approval to receive between $146 million and $200 million from a sale of tax-exempt revenue bonds by The Colorado Education and Cultural Facilities Authority. The money was to go to help install 70 locations in 28 states, under the auspices of providing driver education and training programs to remotely located students and truckers through the IdleAire system. Final approval on this was supposed to have happened last year, but that offer, according to Youngs, is "on the shelf at this point."
Apparently, the reason IdleAire failed to meet its past building goals is that the company jumped the gun in making its announcements. "There is one specific difference between what we believed was happening then and what is happening now, and that is we have the money in the bank," Youngs said.
Youngs, who has been with the company since August 2005, says that when those earlier announcements were made, the company believed funding was imminent, but for various reasons the money did not materialize. Youngs was hired by IdleAire specifically to help roll out more locations. He previously worked for Goody's Family Clothing for 12 years, where he was vice president of store operations, responsible for 370 stores in 20 states.
Since IdleAire was formed in June 2000 and put its first location online in 2002, there has been increased speculation the company may go public to help defray the cost of putting in a system that isn't exactly cheap.
John Doty, IdleAire's director of corporate communications, said this latest phase of construction is expected to be just the beginning of an even further build-out of the IdleAire network. Youngs said taking the company public is still on the radar screen, but there are no definite plans at this point. In fact, one of the reasons officials shelved the plan to build out the system with bonds from The Colorado Education and Facilities Authority is that it could complicate an initial public offering of stock, Youngs said.
As for future service offerings, IdleAire continues to develop two of its own television channels. One currently features country music videos by artists that typically aren't seen on such cable networks such as Country Music Television or Great American Country. Plans for the other channel call for outdoor programming and possibly some driver or fleet programming. Also, a new IdleAire platform will offer games in the future.
Whether IdleAire remains private or goes public or develops its own television channels, drivers and fleets are mainly interested in its core service – using IdleAire to stay warm or cool without truck idling, especially with high fuel prices.
The real question is, can IdleAire deliver on this promise of expanding its network this time around?
