Wi-Fi Provider Gogo Is Hurt By American Airlines' Tough Tactics
Skift Take
Will Gogo make it as a stand-alone company? It still does not look promising. It's odd because customers want in-flight Wi-Fi. But so far Gogo hasn't figured out how to do it and make a profit.
As Delta Air Lines has increasingly cozied up to Gogo, its primary Wi-Fi provider, American Airlines has taken a different approach, removing the company's technology from hundreds of aircraft, and changing the model for how it pays for Gogo's services.
American's tactics have hurt Gogo's results, Gogo's top executives said Tuesday on a third-quarter earnings call. But they assured investors the company, which has had some fiscal trouble in the past year and replaced its CEO in March, would be fine.
American remains a significant Gogo customer, but the airline moved two years ago to use other providers, including Gogo's chief competitor, ViaSat. The airline exercised a clause in its contract allowing it to dump Gogo if it found a competitor with a materially better platform, or what Gogo CEO Oakleigh Thorne called a "shiny new product clause."
After some contentious back-and-forth, and a short-lived lawsuit, American dropped Gogo from 550 aircraft, but agreed to retain it for about 140 other jets, which are getting the company's newest sa
