Gogo doesn't plan big marketing splash after 2Ku upgrades

While Gogo says it's firing on all cylinders and 2Ku is now in commercial service, CEO Michael Small said the in-flight service provider will not be spending money on a big marketing push to let consumers know when Gogo's service is improved.

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Noting during the company's quarterly conference call that while 2Ku is the next best thing, over the last few years, Gogo's legacy product has become sluggish and there's a negative connotation around Gogo as a product, analyst Carter Mansbach with Jupiter Wealth Strategies asked if Gogo planned a marketing campaign or if it would let the airlines take over branding of Wi-Fi on planes and move the focus away from the Gogo name.

Small said airlines are branding more and more the connectivity on their planes and "we are supporting it, and I think the world understands that it is powered by Gogo. But in today's world your product is your brands. And at the end of the day, until we make it faster and meet the needs of the customer, both the airline and their passengers, we're going to have the reputation we currently have in the marketplace, which I think you reasonably described."

"I don't think you need to spend -- there's only one way you do it is to make it real in the marketplace and deliver the bandwidth people want," he added. "And then our customers will Tweet, Facebook and let the world know. That's literally how the world works these days and to tell them it's good when they don't think so doesn't help."

With 2Ku, the gap between Gogo and the ground essentially will be zero, Small said. "We will replicate a ground-like experience in the sky and that's what we need to do to make people love Gogo again," he said. 2Ku uses dual Ku-band satellite antennas – one receiver for the upward link to the aircraft, and the other for the downward, return link to the ground.

So far, Gogo has been awarded but not yet installed 2Ku aircraft on more than 1,000 aircraft. It has won business from Delta Air Lines and International Airlines Group, including British Airways, Iberia, and Aer Lingus. It also recently celebrated the commercial launch of 2Ku on AeroMexico. "Based on airline demand, we are accelerating 2Ku deployment and expect to exceed our 2016 target of 75 installs," Small said.

Small also said during the earnings call that it's now in a world with 2Ku where streaming is available, and he's comfortable the company will be able to meet the needs of an entire aircraft no matter how big the aircraft is. With its legacy equipment, Gogo had to put limits on what passengers can do with its service on planes – no streaming video, for example – because it simply did not have the capacity.

Delta recently announced it is increasing its commitment to 2Ku by at least 350 aircraft, bringing its total 2Ku commitment to more than 600 aircraft in its mainline fleet. Installation of 2Ku will offer customers more than 20 times that of Gogo's ATG technology. This summer, customers will be able to use Wi-Fi and in-flight entertainment from taxi and takeoff through landing on 2Ku-enabled aircraft. In late 2016, Delta will launch IPTV, giving customers the ability to watch live TV from their own devices on 2Ku-enabled aircraft. By the end of 2016, Delta will operate more than 35 aircraft with 2Ku.

Gogo is working to retrofit planes with the new technology, but it's likely going to be fall before it will see much of a break in terms of being able to schedule work due to the busy summer travel season. Its 2Ku backlog now stands at more than 1,000 aircraft.

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