Gogo says it's trying to sell its commercial in-flight internet business amid COVID-19, CEO says company has had “extensive discussions with multiple parties”
Sean O'Kane / The Verge : Tweets: @caseynewton , @mslopatto , and @ecachette Tweets: Casey Newton / @caseynewton : Hopefully Gogo spends a lot of money on these negotiations up front and then they fall apart right away and Gogo has to constantly restart them just to try to get them to work https://twitter.com/... Elizabeth Lopatto / @mslopatto : for sale: in-flight internet business, lightly used https://www.theverge.com/... Ellie Cachette / @ecachette : VC Twitter should pool together to buy GOGO and turn airplane WiFi into something special while maximizing consumers https://twitter.com/...
Context & Ripple Effects
Gogo built its commercial business on a captive market: coverage in 2015 described how price-insensitive customers with no alternatives sustained the company even as speeds deteriorated and fees climbed. The moat cracked when [[a:865105|American Airlines sued for the right to terminate its agreement, citing ViaSat's faster wifi]] — a blow that sent Gogo stock down more than 28% and signaled airlines were no longer locked in.
The company's answer was a technology refresh: a planned in-flight 5G deployment for 2021 targeting smaller aircraft. COVID-19 destroyed that runway — with passenger traffic collapsed, Gogo now says it is shopping the entire commercial in-flight internet unit, with the CEO citing extensive discussions with multiple parties.
First-order effects
- Gogo's commercial-aviation customers have effectively stopped flying, cutting the revenue that business depends on and forcing the company to seek a buyer rather than fund operations through the downturn.
Second-order effects
- Satellite-based rivals like ViaSat — whose speed advantage already gave American Airlines grounds to defect in court — are positioned to pick off airline contracts as a weakened Gogo negotiates from a distressed position.
Third-order effects
- A sale would split in-flight connectivity between a satellite-centric winner serving airlines and whatever remnant Gogo keeps, ending the era when one air-to-ground provider could charge premium prices to a captive cabin.
The trend: COVID-19 is accelerating the consolidation of airline-dependent technology businesses, with in-flight connectivity tipping from air-to-ground incumbents toward satellite providers.