Often when someone says something is not about the money there’s little doubt that it is entirely about the money. When it comes to delivering free WiFi for all of its passengers, however, Delta Air Lines‘ CEO Ed Bastian is probably telling the truth. It is not the cost of the service, but making sure the network can handle the dramatic uptick in demand. And, while it is easy to read that as a slam against the existing infrastructure the reality is far more nuanced than that, and suggests that it really is just a matter of when, not if, Gogo can support the load.
It’s really just a question of technical depths. I’m worried that if we turned it on now, it’s going to cause system outages.– Delta CEO Ed Bastian speaking at the Skift Forum last week about free WiFi for passengers
So, just how close are the companies to reaching that goal? Gogo CEO Oakleigh Thorne declined to give a timeline, yielding to Delta for that announcement, but believes the two company’s progress is impressive and continues to move forward. “The teams are working very collaboratively. We’re looking at a very significant ramp in what we think the take rates will be. We’re busy scaling to make sure the system will handle it properly. We lease capacity, so we’re scaling our capacity up.”
Increasing satellite capacity arguably requires the most lead-time and capital expense, but it is not the only factor in play. As Thorne explains, “[Y]ou scale on many different fronts, everything from portals to [satellite] capacity to ground [gateways]. Obviously the commercial arrangements are changing as well. So there’s all sorts of things that are scaling. We’ve got six work streams that are all running full steam and they all affect different aspects of the program. Some of are technology, some of which are not.”
One challenge with satellite capacity is the long lead times to get new payloads into orbit. With new Ku-band launches slowing and the recent loss of Intelsat 29e there is good reason to question just how much bandwidth is available for Gogo and Delta to consume, especially as the take rates increase. When questioned on whether Gogo has access to enough (not necessarily under contract today, but available) Ku-band capacity to meet the expected demand Thorne offered a simple answer, “Absolutely.”