Gogo sees a strong future, providing multi-bearer connectivity to the business aviation market with significant upside. It just has to upgrade its network infrastructure, get new parts made and certified, and transition its core terrestrial network. It is making progress, but, as with other recent earnings calls, this week’s included more delays in hitting those targets.
We operate in a market with lots of room to grow. In a world where demand for connectivity is surging only 36% of the world’s business jets boast broadband connectivity, only 22% if you include turboprops.
– Gogo CEO Oakleigh Thorne
The recently announce PMA for the Galileo HDX antenna was delayed slightly, for what the company described as a shift in FAA testing requirement in December 2024. Similarly the 5G chip is in fabrication now and expected to ship in May, but that’s also a “small slip” from prior guidance.
To counter those slips – and strong competition from Starlink – Gogo invested in a major marketing push to attract customers and secure deals. The company expects a $25 million hit to free cash flow as a result of the marketing effort. Its efficacy will be seen in new installations from late this year.
On the plus side, Gogo confirmed full funding from the US Government for the rip-and-replace of the legacy air-to-ground network. That’s a massive CapEx savings for the company.
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