Investors Are Giving Up on Gogo Even as Airlines Add Wi-Fi

A decade ago, in-flight Wi-Fi showed so much promise. While few airlines placed big orders for it, many investors figured airline passengers eventually would crave connectivity as on the ground, forcing carriers to catch up and generating big profits for providers. They were half right. Passengers increasingly demand internet — I'll rarely book a flight that doesn't have it — and nearly every airline, except for some low-cost-carriers, has it in some form. And though passengers expect free Wi-Fi nearly everywhere, including hotels, most are willing to buy it aloft. Profits are a different matter. Gogo, a market leader, went public in June 2013 at $17 per share, spiking at nearly $33 per share six months later. But it has trended downward since, and on Tuesday, shares traded as low as about $6. In March, the board replaced long-time CEO Michael Small with Oakleigh Thorne, who, through his family office owns 30 percent of Gogo's stock. The cost of providing in-flight Wi-Fi is immense, and Gogo hasn't created enough revenue to cover it. That problem isn't unique to Gogo — Southwest Airlines' provider Global Eagle Entertainment has also had its share of fiscal drama — but Gogo tends to attract more attention.