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Gogo Inks In-Flight Wireless Service Deal With Aeromexico

Zacks Equity Research

Recently, in-flight connectivity provider, Gogo Inc. (GOGO) struck a deal with Mexico's International airline company – Aeromexico – to deliver Internet and wireless services on select flights of 58 Embraer and Boeing 737 aircraft.

Dating back to Dec 2013, the companies have been planning to enter into a definitive agreement per which Gogo will deploy on-board wireless services on select Aeromexico aircraft along with providing its advanced 2Ku technology to 20 of the latter’s 737 aircraft. Post the integration of such innovative technologies, travelers will be able to enjoy the popular Gogo Vision on-board Internet and 2Ku service from the fourth quarter of 2015.

Meanwhile, the installation of the 2Ku service will allow passengers to access superfast Internet speeds of over 70 Mbps. Moreover, the setting up of next-generation satellites will boost Internet speed to over 100 Mbps. 2Ku antennas are far superior in terms of frequency and costs when compared to other commercially available antennas in the aviation sector. Further, 2Ku will prove to be highly apt for the tropical areas where satellite technologies usually tend to lose efficiency.

A while back, Gogo collaborated with aerospace behemoth The Boeing Co. (BA) in view of the prospect of installing Gogo in-flight connectivity technology in Boeing’s aircraft. Moreover, it has already collaborated with major U.S. airline companies like Aeromexico, American Airlines, Air Canada, AirTran Airways, Alaska Air Group, Inc.(ALK)-owned Alaska Airlines, Delta Air Lines Inc. (DAL), United Airlines, US Airways and Virgin America.

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Apart from in-flight Wi-Fi where Gogo already has a dominant position, it is set to launch messaging and calling programs as well as on-demand entertainment systems. Again, the company is transitioning from its air-to-ground network to a satellite connectivity system that will boost Internet speeds by six times.

Hence, we believe that Gogo’s on-board Internet connectivity services coupled with its upcoming value-added services will certainly drive the company’s top line while moving ahead.

Gogo currently carries a Zacks Rank #3 (Hold).

Read the Full Research Report on BA
Read the Full Research Report on DAL
Read the Full Research Report on ALK
Read the Full Research Report on GOGO


Zacks Investment Research