Airplane Wi-Fi provider looks at IPO

Gogo aims to raise $100 million in an offering to help it expand operations.

By Kim Peterson Dec 23, 2011 2:43PM
Image: Passengers on an airplane (© Image Source/Getty Images)If you accessed Wi-Fi on a flight in North America recently, chances are you used technology from Gogo.

The company is the main provider of on-board Wi-Fi in the U.S., and needs more money to expand its business. Gogo has filed paperwork to raise $100 million in an initial public offering, and will trade under the ticker symbol GOGO.

Gogo handles in-flight Internet for nine of the 10 North American airlines that offer the service, including Delta Air (DAL), Alaska Airlines (ALK), US Airways (LCC) and American Airlines, owned by AMR (AMR). It's on a trial basis with United Airlines (UAL).

Those are some pretty major partners. Gogo has equipped about 1,300 commercial planes -- more than about 85% of the Internet-enabled aircraft in North America.

But even though Gogo is the dominant provider here, it's still in a niche business. The company estimates that only 16% of commercial aircraft in North America (and only 6% of commercial aircraft worldwide) have Wi-Fi at this point. So the potential for growth is there.

Airplanes have been somewhat reluctant to equip a plane with Wi-Fi. For one thing, it's fairly expensive -- about $100,000, according to USA Today -- with little return. Fewer than 10% of fliers actually use it, industry experts estimate.

But passenger demand for Wi-Fi will only increase, particularly as more fliers bring iPads and smartphones on board. It's a way to wring another fee out of passengers -- one that people are actually willing to pay for. We may get to the point where some passengers are only choosing flights that have Wi-Fi available.

Gogo is planning to get more airline partners, drive user adoption and expand internationally.

For the first nine months of the year, it has brought in $114 million in revenue -- surpassing the $95 million in received for all of 2010. It barely eked out a profit of $2.4 million for the first nine months of this year, but that's better than the hundreds of millions of dollars in losses it posted for the last three years.

1Comment
avatar

How quickly we take it for granted.  I remember those bad old days when you were lucky if a flight had some beat up wrinkled magazines in the pouch in front of you. And when the stylish self confident and well groomed lady casually pushed a high tech cart filled with gastric delights from sky chef down the isle your only worry was if someone else sneezed all over that wrinkled magazine with an uncanny number of advertisements for CIA recruiting efforts on the inner cover.

 

The last few?  I felt lucky to be shoved in a slot reminiscent of a toilet on a submarine. And not trampled to death by a bleating, mooing, farting stampede of blank eyed candidates for a crappy low budget remake of thriller.  The only entertainment being contemplations of imploring Helga the she bitch of flight 13 to pry me out of the corner because my foot went to sleep and my leg would not distend properly.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2013 Microsoft. All rights reserved.

Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.

Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.

Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

127
127 rated 1
269
269 rated 2
463
463 rated 3
587
587 rated 4
658
658 rated 5
615
615 rated 6
645
645 rated 7
430
430 rated 8
263
263 rated 9
137
137 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
COPConocoPhillips10
NWSNews Ord Shs Class B10
YHOOYahoo! Inc10
TJXTJX Companies Inc9
AMXAmerica Movil ADR Rep 20 Ord Shs Series L9
More

LATEST POSTS

Scary story: the 2013 market looks like 1987

All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.

Fidelity Brokerage Services, Member NYSE, SIPC. (c) 2011 FMR LLC. All rights reserved

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.