First read is on us.

Subscribe today to keep up with the latest travel industry news.

Gogo CEO Concedes Company Lost Its Way — and Often the Wi-Fi Connectivity Too


Skift Take

How much of a future does Gogo have as an independent public company? We'll see. But it sounds like the new CEO is open to pursuing alternatives.

For years, passengers — and at least one major U.S. airline CEO — have complained about unreliable Gogo in-flight Wi-Fi connections. On Friday, they learned they have an ally in new Gogo CEO and long-time board member Oakleigh Thorne, who admitted he has sometimes felt similarly.

“I’m sure everyone on this call has a frustrating Gogo story, either a hard time connecting to the network or an arduous log-on process or just slow performance,” Thorne said. “As a board member, I used to complain about all those things all the time. And now I get to complain about them as the CEO.”

In sometimes harsh language, Thorne, who through his family office owns 30 percent of Gogo’s equity, suggested the company had lost its way, investing in non-core products and missing deadlines for airline installations, while sometimes providing a so-so experience for passengers. Thorne replaced then-CEO Michael Small in March.

Thorne told investors Gogo may need more financing, and noted the in-flight WiFi industry may be ripe for consolidation, though he stopped short of saying the company is on the market. In addition to competitors who might be interested in getting bigger, Thorne also said private equity firms and “large strategic players” are interested in connectivity companies.

“Every lawyer in the room will make sure that I tell you that we would never comment on whether we are in the process or not in the process or the stage of a process or whether we’ve been approached,” said Thorne. “I will say this, which is that our board has a duty to do what’s best for shareholders, and as a large shareholder, I’m going to make sure that they do that. And so as we watch this — what we call the Game of Thrones — play out over the next couple of years, we are very committed to try to …. create shareholder value for our shareholders.”

His company’s stock, down roughly 13 percent in the four hours after the call, was trading at about $8.30 per share at 1 p.m. in New York, far short of its December 2013 peak of almost $33.

In the short term, Thorne said he would try to get Gogo, which hasn’t had a profitable quarter since its 2013 initial public offering, back on track. To improve airline and customer satisfaction, Thorne said Gogo will stop measuring success only by tracking how well the connection reaches the airplane, and begin more thoroughly gauging the user experience.

“We’re changing all of that and rolling out tools to measure network connection times, portal performance and browsing performance in the cabin,” he said.

Issues with 2KU System

Gogo will also continue to try to work through problems on its new 2KU system, a satellite platform Gogo has said provides roughly the same experience as home-WiFi browsing. Delta Air Lines is the largest customer, and over the winter, Delta complained it was not working as it should.

Gogo discovered that de-icing fluid used during winter operations was getting into the antenna and affecting the connection. Reliability, Thorne said, went from greater than 98 percent last summer to the “mid-80s” during winter. He also said Gogo discovered it had some “manufacturing issues” and software problems.

The 2KU system is now at 96 percent reliability, he said, and Gogo is planning to introduce changes that will keep de-icing fluid from affecting the antenna. Also, he said, Gogo is updating modems on 2KU-equipped aircraft.

“While this improvement in 2KU performance is nice, the most important learning from this exercise is that you can’t just fix problems, you have to fix causes,” Thorne said, adding that the company will reorganize its executive structure to ensure more oversight over key projects. 

Gogo reported a net loss for the first quarter of $27.4 million, on consolidated revenues of $231.8 million.

Up Next

Online Travel

Building Travel Brand Love through Content and Culture

Aligning with major cultural moments can help brands connect with the right audience at the right time. Live sports, music tours, and shopping events like Prime Day can unlock huge opportunities for travel advertisers to build long-term loyalty and drive bookings.
Sponsored