Gogo posts positive revenue gains with Q4 2016 results

Gogo President and CEO Michael Small.
Gogo President and CEO Michael Small.

Gogo says revenues from its Commercial Aviation, North America (CA-NA), business have increased to $101.1 million, up 20% from Q4 2015, driven primarily by an increase in aircraft online.

Speaking as its Q4 2016 results were announced, Michael Small, Gogo’s President and CEO, said: “We are increasing 2Ku installation guidance to 450 to 550 aircraft in 2017 and 650 to 750 in 2018.

“2Ku is transformative for global aviation. With speeds exceeding 100 Mbps, it brings a streaming class connectivity experience to everyone on the plane.

“2Ku performance demonstrates industry leading speed, coverage, and service availability, and we now have more than 130 2Ku aircraft installed.”

Small said that it was seeing increased take rates as a result of more bandwidth being available with both 2Ku and ATG-4.

” We are moving into an era of bandwidth abundance,” Small said.

This was also boosted by initiatives, such as free Wi-Fi being made available on Japan Airlines (JAL). He added that the 2Ku install time is now down to three days, saying it was  a “best in industry”.

Gogo 2Ku

Norman Smagley, Gogo’s Executive Vice President and CFO, added: “With accelerated 2Ku installations and improved operating leverage, we now expect to become free cash flow positive in 2019, a year earlier than our prior guidance.”

Gogo's "2Ku" dual Ku-band antenna.
Gogo’s “2Ku” dual Ku-band antenna.

Gogo says its number of connected aircraft increased to 2,676, up 47 aircraft from September 30, 2016, and includes 59 2Ku and more than 1,700 ATG-4 equipped aircraft.

As of December 31, 2016, CA-NA had approximately 850 aircraft awarded for installation or conversion to 2Ku, 60 of which are net new aircraft.

Average monthly service revenue per aircraft equivalent, or ARPA, was $11,780, up 2% from Q4 2015.

Service revenue from its Business Aviation (BA) business increased to $36.4 million, up 28% from Q4 2015, driven primarily by a 20% increase in ATG systems online and a 7% increase in average monthly service revenue per ATG unit online.

Service revenue accounted for 71% of the segment’s total revenue in Q4 2016.

Total revenue from its Commercial Aviation – Rest of World (CA-ROW) business increased to $7.4 million, up 76% from Q4 2015, driven primarily by an increase in aircraft online and higher revenue per aircraft.

Aircraft online increased to 267, up 65 aircraft from Q4 2015. CA-ROW had approximately 560 net new 2Ku awarded but not yet installed aircraft as of December 31, 2016.

Gogo said I has brought more than 350 commercial aircraft and nearly 700 ATG business aircraft online in 2016.

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