In-flight connectivity specialists Gogo says it is not giving financial guidance for its 2020 financial year because of the Coronavirus and its likely impact on passengers and flying in general. The company also warned that the virus, and consequent reduction in passenger flights, would mean its satellite bandwidth suppliers would be affected.

“Roughly 73 per cent of our in-air revenue from flights originating in North America, 19 per cent originating in Asia, 5 per cent in Europe, and 3 per cent elsewhere. In January and February, we were on track for a great start to the year at both our Business Aviation division and our Commercial Aviation division. And two weeks ago, we started to see a significant decline in Asia for our CA division, as US airlines cancelled flights to the region, and domestic travel in Japan declined significantly,” said Oakleigh Thorne, Gogo’s President/CEO.

He explained the current situation for its satellite contracts, saying: “As we replace expiring rest of world satellite contracts with new contracts, on average, we’re seeing a 67 per cent decline in per unit pricing. If all of our current capacity in rest of world were priced at those levels today, our Rest of World segment would break even on a segment profit basis in 2021, and be profitable in 2022. Of course, not all those contracts are at those prices today, but two-thirds of the current contracts in Rest of World will expire in the next three years, and we’ll have the opportunity to replace them with much cheaper capacity. Two other positive trends are non-geosynchronous orbit satellites and GSOs, which we expect to start coming online in 2022.”

Thorne added that Gogo could look at the satellite contracts and despite their fixed status, negotiations were possible. “We are very valuable customer to the satellite companies. We are the largest customer for a few of them. We are the fastest-growing customer prior to coronavirus. And we will be the largest customer and the fastest-growing after coronavirus passes. So there is a lot of benefit for them to work with us to help us get through this pandemic.”

“Our efforts are currently centered on managing the effects of the Coronavirus outbreak on our customers and employees,” said Thorne.  “Gogo finished 2019 strongly as the Company benefitted from continued execution and a sharp uptick in our BA results in the fourth quarter.  We are focused on positioning the Company for ultimate value creation as our industry rapidly evolves.”

Chicago-based Gogo reported Q4 revenues of $221.3 million (up 2 percent), and for the full year of $835.7 million. Its net loss decreased to $146.0 million, an improvement of 10 percent from 2018, primarily related to the performance improvement in CA-ROW and CA-NA. Excluding the loss on extinguishment of debt from both 2019 and 2018, net loss would have improved by 38 percent from 2018, said the company.

Gogo reported that its Ku2-installed devices reached 1407 aircraft out of a total of 1657 aircraft and with a backlog of almost 950 aircraft and growth of 150 new orders in Q4.

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