Scott Carmichael

Gogo has received a number of inquiries regarding vendor diversification in the airline industry. Diversification of inflight connectivity service providers is the typical practice in the airline industry. In fact, the vast majority of the world’s commercial airlines use more than one connectivity provider.

As the leading inflight connectivity provider, Gogo has benefited from multi-sourcing by its airline customers.  Indeed, half of Gogo’s existing airline customer base diversified to Gogo.  In almost every case where a Gogo airline partner selected a competitor for some of its aircraft, the airline subsequently reaffirmed its confidence in Gogo by awarding additional aircraft to us. Further, Gogo has recently added partnerships with some of the leading airlines in Europe and Asia, all of whom had an existing incumbent inflight connectivity service provider.

We operate in a competitive market, and when it comes to choosing providers, airlines make choices for inflight connectivity services for a variety of reasons – supplier diversity; supplier incumbency; cost; product bundling; and convenience, i.e. whether the technology is line-fit or what technology is best for a particular fleet. That said, Gogo’s track record of winning competitive bids speaks for itself, with us having won approximately 40 percent of global aircraft awarded for connectivity since the beginning of 2014.

With 2Ku, the industry’s most advanced technology, and leading market share, Gogo is well positioned to capitalize on its significant growth opportunities and fully expects supplier diversification to continue in this large and under-penetrated market. As previously communicated at our Investor Day, the growth opportunities for Gogo are much greater than a single fleet or airline as the industry is not a zero sum, winner take all game. With the most comprehensive portfolio of products and services that best meet the needs of aviation and an industry leading win rate, Gogo remains confident in its ability to drive growth and extend our share.

The inquiries we have received follow the release of an analyst’s report that Gogo believes used certain information selectively to produce a potentially misleading portrait of the company’s business. While as a matter of practice, Gogo does not typically comment on analysts’ coverage, we believe it is appropriate to set the record straight. We are committed to having an open dialogue and communicating our value proposition to the market, while clearing up any potential confusion. We look forward to continuing to share our progress and provide updates on our business.

 

 

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