A big, fat zero. That’s the number inflight wifi connectivity provider Gogo reported this morning. But it is the good kind of zero. Since implementing a collection of retrofits for its 2Ku satellite antenna systems Gogo and its airline customers have reported zero connections out of service on modified aircraft as a result of deicing fluid seepage. That number was significantly higher a year ago, prior to the fixes. As a result, Gogo also guided higher for its Q4 2018 earnings estimates.
More than 675 aircraft have received the retrofit package, representing 97% of the installed fleet in North America. Those planes are estimates to have flown some 5,000 flights where the 2Ku system was deiced in the waning months of 2018, all without incident. Gogo will continue to modify existing installs as part of regular maintenance cycles for the aircraft. All new installations include the mitigation adjustments.
The successful mitigation also means Gogo can release some of the cash it previously reserved for possible additional mitigation work. This is a strong positive development for the company.
As a result of the success of the de-icing modifications, Gogo did not incur certain forecasted costs associated with further de-icing efforts in Q4 2018, and is raising its Adjusted EBITDA guidance to the high end of its previously announced range of $45 million to $60 million for the year 2018.
Overall system availability in December rose to 98%, a jump from the 90% availability seen in December 2017.
Other Gogo 2Ku installation challenges
Gogo is still awaiting resolution on the installation challenges it faces for certain A330 and A340 installations of the 2Ku system. That work, managed by Airbus, saw excessive vibrations applied to the ELT antenna just aft of the 2Ku installation. New installations are suspended under that certification pending a revision and further testing from Airbus.
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