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Delta Trims Gogo Wi-Fi Pact To Open Way For New Suppliers

Jun 28,2020

Delta Air Lines Inc. and Wi-Fi supplier Gogo Inc. agreed to shorten their contract on some aircraft by as much as seven years, opening the door for the carrier to consider other providers as it works toward offering free on-board connectivity. Gogo shares fell the most in two months.

The agreement, disclosed by Gogo in a regulatory filing Thursday, covers 13 aircraft types in Delta¡¯s fleet, and accelerates expiration dates to Nov. 1 to June 2, 2022. The original agreement was to run through 2027, Gogo has said. Gogo is Delta¡¯s only in-flight Wi-Fi provider.

The agreement may help Delta Chief Executive Officer Ed Bastian achieve his pledge to offer free onboard Wi-Fi by allowing the Atlanta-based carrier to enlist providers that use different technology. The airline has said there¡¯s not sufficient Ku band satellite capacity over North America to meet its ¡°user experience expectations for free Wi-Fi service on its desired timeline,¡± Gogo¡¯s filling said.

¡°We¡¯ve accelerated our plans to reimagine onboard Wi-Fi,¡± said Kathryn Steele, a Delta spokeswoman. ¡°As part of this, we need added flexibility to work closely with partners ¨C- including Gogo ¨C- to leverage the right technologies for our fleet and deliver the best experience possible.¡±

Gogo dropped 18 per cent to US$2.47 at 2:13 p.m. in New York amid a broad market rout. The stock earlier tumbled to as low as US$2.45 for the sharpest decline since April 3. Delta slid 12 per cent to US$28.

¡°Though we do not relish the idea of having a competitor join us at Delta, this amendment gives us time to complete our 2Ka offering and add capacity to our 2Ku network, and will enable us to compete effectively for the fleets in question,¡± Google CEO Oakleigh Thorne said in the filing.

Gogo¡¯s current agreement to provide 2Ku online access covers 575 predominantly single-aisle, mainline jets that fly routes in North America. The company also has contracts for about 694 additional Delta aircraft, consisting of twin-aisle jets that fly international routes using Ku satellite capacity and a mix of older mainline aircraft and regional jets flying domestic routes, Gogo said. 2Ku is the company¡¯s satellite-based broadband service.

Under this background, the 2nd Connected Aircraft China Congress 2020 will be held on August 13th - 14th , 2020 in Shanghai, China, the congress was hosted by Civil Aircraft Operation Support Technology Sub-committee of CSAA, supported by COMAC Shanghai Aircraft Design And Research Institute, organized by COMAC Shanghai Aircraft Customer Service Co., Ltd. the congress will mainly focused on in-flight connective technologies and operation.

Register your interest or get in touch with marketing@galleon.cc for more details.

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