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Shares of Gogo Inc. soared after the company ended a legal dispute over contract terms with American Airlines Group Inc., though the airline is still considering a switch to a competitor for in-flight Wi-Fi service on about 200 planes.
Gogo rose as much as 24 percent, the most since November 2013, after the Chicago-based company said American will no longer pursue legal action. By 2:22 p.m. in New York, it had given back some of those gains to trade at $11.08, up 10 percent.
Earlier this month, American had filed the action in a Texas district court asking a judge to protect its right to terminate its Gogo contract if the airline secured a better Wi- Fi service offer. American is considering Gogo’s competitor ViaSat Inc. for faster, cheaper service. The contract gives Gogo a chance to prove to American that it can beat competing offers.
American spokesman Casey Norton confirmed that the Fort Worth, Texas-based airliner won’t pursue the case.
“Gogo can submit a proposal and we will evaluate their proposal when we receive it,” Norton said.
This article was written by Michaela Ross and Mary Schlangenstein from Bloomberg and was legally licensed through the NewsCred publisher network.