Intelsat has wrapped up all the necessaries to purchase the commercial aviation arm of inflight connectivity company Gogo. The deal, worth $400 million, sees Intelsat taking over the operation of nine leading airlines with more than 3,000 connected aircraft.
Gogo sale is complete
The sale of inflight connectivity company Gogo to satellite operator Intelsat has been concluded this week. Intelsat bought Gogo’s commercial aviation arm for a sum of $400 million, in a bid to develop better relationships with airlines themselves.
Intelsat has long been a leading communications provider, with one of the world’s largest fleets of orbiting satellites. By vertically aligning itself with a direct provider of solutions to airlines, it hopes that it can further grow its business and expand more directly into the connected aviation sector.
Intelsat Chief Executive Stephen Spengler commented on the tie-up, saying,
“Demand for inflight broadband is expected to grow at a double-digit rate over the next decade, and we remain committed to long-term success in broadband mobility services.
“With Gogo Commercial Aviation, we will bring our complementary and collective expertise to help solve our customers’ toughest inflight connectivity and entertainment challenges. Our ability to initiate, execute and rapidly finalize this transaction demonstrates the forward momentum that Intelsat has maintained over the course of this year.”
Gogo will continue to exist as a brand but will focus on its air-to-ground infrastructure and on its activities in the business aviation sector. For Intelsat, the purchase has seen it acquire inflight WiFi connectivity services for nine of the top 20 global airlines and an installed base of more than 3,000 commercial aircraft.
Could Delta come back?
It’s been six months since Delta broke its exclusivity deal with Gogo in a bid to begin searching for a provider to give it adequate capacity to start offering WiFi for free. Delta has long been pushing for free WiFi for all passengers but was not prepared to offer a sub-par solution.
With Intelsat onboard, there may be an opportunity for the company to reset Delta, and to bring better capacity to its WiFi services. This could see Delta coming back into the fold, but will depend on the offering from Intelsat going forward.
The company remains positive that it will be able to accommodate the increased demand expected in coming years, which could be beneficial to airlines like Delta. Spengler noted,
“Combining Intelsat’s next-generation global telecommunications network with Gogo Commercial Aviation’s leading capabilities and airline relationships will create unprecedented innovation in inflight digital connectivity, unlocking exciting new growth and brand loyalty opportunities across the airline industry.
“With our powerful, integrated offering, airlines will no longer need to trade off speed, reliability or availability for coverage, even when flying at full capacity in and out of the busiest airport hubs.”
Time will tell if the increased resilience is enough to fulfill Delta’s wish-list. One thing’s for sure, with Gogo’s footprint in commercial aviation and Intelsat’s significant satellite network, the combination is going to prove tough competition for Inmarsat’s new GX North America.
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