Has North America truly run out of Ku-band capacity? That’s one of the arguments being made by Delta Air Lines as it renegotiated its inflight connectivity contract with Gogo. The company announced the new deal this week, and the potential market shift is massive.
We are also very pleased to see Delta’s continued focus on providing free Wi-fi despite the impact of COVID-19 and view that as a positive for the in-flight connectivity industry as it will drive demand.– Gogo CEO Oakleigh Thorne
Changing the contract terms on the terms
The shift in the Gogo/Delta relationship is driven, in large part, by Delta’s commitment to deliver inflight connectivity for free to passengers. Under the original contract Gogo provided the service and managed the payments, what the company calls the “turnkey” approach. But that only works when Gogo is in control of the pricing and service levels end-to-end. With the airline in control, a necessary step for the airline to make it free, the contract needed to be rewritten anyways. The new terms are much more favorable to Delta than to Gogo.
Though we do not relish the idea of having a competitor join us at Delta, this amendment gives us time to complete our 2Ka offering and add capacity to our 2Ku network and will enable us to compete effectively for the fleets in question.– Oak Thorne
According to the companies, “Delta has informed Gogo that since it will be paying for Wi-fi services under the airline directed business model it is a strategic procurement imperative that it diversify its provider base in order to generate competition between providers, and that it intends to split its fleet between Gogo and a competitor.”
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