With the infusion of new cash coming as part of the Intelsat deal Gogo is well-positioned to invest in its updated air-to-ground (ATG) network, branded “Gogo 5G.” And the company has high hopes for increased revenue that network will deliver, both from its Business Aviation customers and from Intelsat. The latter secured a 10-year exclusive contract to resell Gogo’s ATG connectivity to commercial airlines and the (mostly) regional jets flying with the system installed as part of the deal to acquire the Commercial Aviation business.
As of 30 June 2020 Gogo had 1,531 planes equipped with the ATG system across North America. As those transition to the new Intelsat venture they will remain online, with the Gogo Business Aviation unit selling wholesale capacity to Intelsat. That deal is exclusive in the commercial aviation market but is also dependent on reaching annual minimum revenue guarantees to the tune of $177.5 million over 10 years. The structure of those guarantees suggests that Gogo expects either significantly higher rates or data volumes to be consumed by the commercial aircraft as the Gogo 5G network comes online.
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