American Airlines has filed a lawsuit against Gogo for slow inflight Wi-Fi. AA wants to get out of their contract with Gogo (which is in effect until 2018), and switch to ViaSat, which provides Wi-Fi on United Airlines, JetBlue and Virgin America and is significantly faster than Gogo’s service. Note, that Gogo also provides Wi-Fi on Delta flights.
Shares of GoGo (GOGO) fell by as much as 43% Tuesday, February 17. ViaSat’s (VSAT) stock rose 10%.
According to the terms of the contract, Gogo will get a certain amount of time to give American a proposal to persuade the airline to stay. Gogo needs to let AA know how they plan to step up their game.
Also, not great news for American Express either, which includes 10 complimentary Gogo passes as a benefit with the American Express Business Platinum card.