Revolutionizing In-Flight Wireless

SHARE THIS ARTICLE

By Alexia Sparling, an insider at Lease Advisors

Nine out of ten aircraft passengers find in-flight wireless internet frustrating due to slow and inconsistent connections. To meet the demands of dissatisfied customers, companies both large and small are vying to offer fast, reliable in-flight wireless connection. Gogo Inc., a company based out of Itasca, Illinois, offers in-flight wi-fi that operates on wireless signals provided by Gogo’s Air-To-Ground network. Gogo has equipped over 8,000 aircraft with its technology by partnering with American Airlines, Delta Air Lines, Virgin America and seven other airlines. Although Gogo is swiftly expanding to meet consumer demand, Gogo reported that within the first quarter only six percent of flyers on Gogo-equipped flights utilized the service. Gogo customers expressed concern about the seemingly excessive cost and complained that the service was poor on the 176-tower network.

Last April, AT&T Wireless announced that it would be entering the space. AT&T, the second-largest carrier in the United States, stated that its primary goal would be to improve speed by offering 4G in-flight broadband service. The company planned for a late-2015 launch, claiming the network would “transform airborne connectivity.”  AT&T was initially planning to team with Honeywell’s aerospace division to construct an air-to-ground network. This past November,  AT&T cancelled its plans to expand its 4G network to airline carriers. Emily Edmonds, an AT&T spokeswoman, explains that “after a thorough review of our investment portfolio, the company decided to no longer pursue entry into the in-flight connectivity industry.” AT&T has decided to focus its funds on large acquisitions and transformative investments, such as international and video. On November 7th, the company announced an agreement to purchase the Mexican carrier Lusacell for $2.5 billion.

In response, Shares of Gogo which had initially tanked with the announcement of AT&T’s plans shot up more than 8% by the following Monday; Gogo’s shares are still down 27% this year.

The FCC continues to advocate for a better in-flight internet experience, however that process is often stalled due to various regulatory processes. Gogo’s relevance remains in question. Following AT&T’s announcement to abandon plans, Gogo’s chief executive Michael Small commented, “We continue to improve our product and services and look forward to competing with existing competitors and anyone else who wants to get into the space.”

Reader Interactions

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.