Some of the airlines are likely to slow down their rollout of WiFi and raise passenger charges as inflight Internet provider revamps its business model to do away with subsidies for installing and maintaining the technology.
Gogo CEO Oakleigh Thorne says the company would eliminate or materially reduce subsidies that we offer airlines in all future deals that marks a move which will see airlines paying more to outfit their fleets with WiFi.
Thorne recounted that the subsidy model has led to the entire industry suffering significant losses, and it was started by them when they had first got into the commercial aviation market in the mid-2000s and he went on to describe the new approach as a “significant pivot” in their model.
Gogo powers Virgin Australia’s domestic and international WiFi services as well as those of several overseas carriers, including American Airlines, British Airways, Delta Air Lines and Japan Airlines.
Airlines which have already ordered connectivity systems from Gogo could find themselves losing out on the subsidies they had previously agreed upon, as reported by a leading airline news media and Thorne has admitted that Gogo was “planning to have some conversations” with their airline partnering around that.
Tags: gogo, Oakleigh Thorne, Virgin Australia
