Gogo tumbles to a loss
May 12, 2020
By Chris Forrester
With air travel decimated it is hardly a surprise that In-Flight connectivity and broadband supplier Gogo has declared a loss for its Q1 trading (to March 31st). The company said that the satellite operators who carry their services were reducing their fees to Gogo.
Gogo’s consolidated revenue was $184.5 million (€170.4m) but which converted into a net loss of $84.8 million (up from $16.8 million in Q1/2019. The loss includes impairment charges of $46.4 million related to the impairment of certain long-lived assets and $6.8 million in additional credit loss reserves taken during the quarter, said the company.
Business aviation saw an increase in revenues of 6 percent to $35.9 million (compared with the same period last year).
Cash and cash equivalents were $214.2 million as of March 31, 2020, including $22 million drawn in March from the Company’s credit facility. This compares to cash and cash equivalents of $170.0 million as of December 31, 2019.
Gogo reached 1,511 2Ku and 1,758 total commercial aviation satellite aircraft online as of March 31st 2020, with a backlog of ~800 2Ku aircraft. In Q1 2020, 2Ku aircraft online increased by 104, said a company statement.
Currently some 54 per cent of its workforce are furloughed, affecting some 600 employees.
Gogo said that ongoing negotiations with suppliers and customers to improve contract terms, the delay of aircraft equipment installations, the deferral of capital equipment purchases, and the reduction of marketing, travel and non-essential spend. “Half of our satellite suppliers have agreed contract modifications to share our pain. Most of the rest will too,” said Gogo.
“We started the year well ahead of plan, but Commercial Aviation demand fell sharply in March due to Covid-19 and has deteriorated further in Q2,” said Oakleigh Thorne, Gogo’s President and CEO. “There has also been a slowdown in new activations and an increase in account suspensions in our Business Aviation segment, which we expect will negatively impact BA revenue in Q2.”