Unless you are fortunate enough to fly on private jets when you travel, you have probably had some kind of experience with in-flight internet on commercial flights. What used to be a luxury is now standard on most full fare carriers and many discount carriers. Just the thought of passing the time of a long flight browsing social media or catching up on emails makes flying just a little bit more bearable...Unless your flights internet is powered by Gogo (NASDAQ: GOGO).
What started as a great idea and a promising company quickly turned to passenger frustration. Gogo had all of the best intentions but their in-flight internet coverage was spotty, and slow. Add to that that they initially charged almost $20 for internet for a single day of flying. Gogo has become the company that people love to hate and love to tell people how much they hate them. Like the utility companies. Airlines have taken notice and demanded that Gogo improve the quality. American Airlines (NYSE: AAL) has gone as far as to sue Gogo to terminate their agreement and switch to rival AT&T (NYSE: ATT).
If it's even possible, their stock price has performed worse than the internet they provide. Shares have lost 42% so far this year with every meaningful rally being sold into aggressively. Last year's performance wasn't any better.
Despite the social and public headwinds, Gogo hopes to change their future with a new satellite in-flight internet system called 2Ku. The previous in-flight internet was connected "ground-to air" so one could imagine the connection interruptions as the signal bounced from tower to tower. The new 70 MBPS connection is significantly faster than Gogo's older systems, which currently get about 10 MBPS.
"To date we've had browsing on board, sending messages and sending text. We haven't been able to have the same connectivity on board you've had on the ground. We now have that," said Stephen Scott, head of global innovation at International Airlines Group.
This could be just what the company needs to change its image and it seems they know they need to make a great "second" impression. To demonstrate the new internet, Gogo took a group of Silicon Valley reporters on a one hour plane ride to nowhere. One reporter says that they were able to open Netflix on their phone and streamed "Blue Planet". Another reporter stated that they Face Timed their best friend, tweeted selfies from the cockpit, and watched a Nova special called "Why Planes Vanish" on a laptop.
It appears that the airlines are already taking notice as International Airlines Group, which owns British Airways, Aer Lingus and Iberia airlines, announced on Thursday it will be one of the first carriers to add the technology. It's retrofitting 90% of its fleet over the next three years to offer 2Ku. Some Aeromexio flights also have it installed, and Delta (NYSE: DAL) said by the end of 2016, it should be on around 30 of its planes.
While Gogo seems to be on the right track, they still have a long way to go. Its very hard to win back a scorned customer but Gogo is giving it the ole' college try and, as a frequent traveler, I wish them all the best.