PaxEx.Aero

The Business of Passenger Experience

Oakleigh Thorne

Gogo’s strong Q3 offset by global ARPA concerns

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Gogo revised its expectations for 2020 and beyond, announcing updated goals as the company continues its drive towards profitability. Alas, details on those revised targets will not be shared with investors. CEO Oakleigh Thorne shared that the new math takes into account "more realistic expectations" of satellite costs and the shift to the airline-directed model. Assuming the new numbers are part of the Q3 '18 numbers they should help the company significantly, though there are indications some parts of the operation could revert to higher costs. The inability for global revenue to keep pace with growth in North America is also concerning given the company's current backlog.

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Is it time for Gogo to split?

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Is Gogo worth more split in half rather than as a single company? Since the management transition earlier this year that idea has been floated more than once. CEO Oakleigh Thorne suggested that either the Business or Commercial Aviation halves should be worth more than the current market cap. He's also suggested that splitting the company along those lines would be a relatively easy transaction to pull off, with BizAv owning the ATG network and Commercial the satellite services. With an impending deadline to refinance the company's debt it seems like such a move could solve a lot of the problems. We know that various suitors have put offers on the table for all or part of the company and that those are being evaluated by the Board of Directors. Here's how one of them could play out.

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Radome tells a tale of vendor diversity

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The first Virgin Atlantic A350-1000 is starting to come together in Toulouse, France. Parts for MSN 274 are arriving at the final assembly line and there's an interesting surprise atop the aft fuselage section: A radome.

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Counting connections and commitments

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Connectivity installations slow slightly over the summer, allowing an opportunity to take a big picture look at the industry and where the various players sit in terms of connected aircraft and future commitments. Compared to a year ago some players have shifted positions, even as the total committed count increases. The latter is definitely good news for all involved while the former is better for some than others.

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American Airlines extends Viasat deal to A321neo fleet

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American Airlines will take the Viasat Ka-band inflight connectivity solution on its A321neo fleet when deliveries begin in 2019. The 100-aircraft deal was secured in recent weeks and announced by Viasat as part of its quarterly earnings release Thursday afternoon.

An asterisk on Gogo’s improving revenue numbers

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Gogo posted better than anticipated numbers for Q2 '18 this morning, giving the company's share price a nice boost in early morning trading, though it has since given back some of the gains. The business aviation segment continues to lead the company's fortunes but some glimmers of success in the commercial segments are showing, too. So long as American Airlines is excluded from all considerations.

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Gogo 2020 program aims for massive cost cuts

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Gogo plans significant cost cuts as it seeks to shore up its financial position. Facing a financing crunch the company's "Gogo 2020" business plan unveiled this week will see hundreds of millions of dollars cut from cost side of the balance sheet as jobs and programs are dropped from the company.

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Alaska Airlines teases shift in connectivity business model

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As Alaska Airilnes shifts its aircraft to Gogo's 2Ku offering passengers will see increased bandwidth, hopefully driving an increase in the number online. But a change in the way the product is priced could throw a wrench in those plans.

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New direction, new challenges for Gogo: Q1 18 numbers

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Sticky 2Ku antennae will cost Gogo north of $25mm to repair or replace, and that's not the only challenge new CEO Oak Thorne faced as he presented his first quarterly earnings call for the inflight connectivity provider.

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