Gogo Shares Drop -30% after American Declares Plans to Drop Service

by Adam

Gogo shares dropped as much as -30% this morning as it was revealed yesterday that the Chicago based in-flight broadband internet service provider is being sued by American Airlines in an attempt to drop service and switch providers. Apparently, the current contract allows American to drop Gogo if it finds a company offering a superior service.  AA says that ViaSat is able to offer such a service on JetBlue, United, and Virgin America aircraft.

As such, American Airlines has decided to exercise its rights under the Agreement and recently notified Gogo that ViaSat offers an in-flight connectivity system that materially improves on Gogo’s air-to-ground system.

Gogo says that they plan to submit their own updated proposal and are looking to maintain their relationship with the world’s largest carrier.

“We have no comment on the merits of this litigation, but we would like to note that American is a valued customer of ours and that we look forward to resolving the disagreement regarding contract interpretation that led to this declaratory judgment action.”


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