In-flight connectivity provider Gogo certainly has seen its share of troubles, but its new CEO is confident the future is bright for the company and its ability to deliver for passengers and airlines.
One of its issues has to do with Chinese vendor ZTE. The Department of Commerce recently issued a denial order impacting ZTE, a major supplier to Gogo for its next-gen Air-to-Ground system and one that helped maintain its original ATG network. The denial order broadly forbids U.S. companies from supplying goods, software and technology to ZTE.
“We are working hard on assessing the legal, regulatory, supply chain and technology issues presented by this order,” new CEO and President Oakleigh Thorne told analysts during the company's first-quarter conference call. “At this time, we have not been able to determine whether the order applies to our technology” nor the impact on the timing or cost of its next-gen project.
That said, the company has been working on some sort of next-gen ground project since at least 2010, and it has considered many other technology paths and vendors, “so if we need to change direction, we can,” though that would require more cost and delay.
During the Q&A, Thorne said his team can’t project the impact on its next-gen project until they understand how they’re going to resolve the ZTE issue. The plan was to have next-gen A2G commercially available by the end of this year, but given the Commerce Department order, “we’re trying to sort out the impact of that. We were literally in the midst of taking delivery of antennas to install right now. So it caught us pretty much mid-stride.”
Thorne, whose family owns 30% equity in the company, took over as CEO and president in March to replace Michael Small. The company is also working to resolve an issue that cropped up this past winter where de-icing fluid got into its 2Ku antennas, preventing them from working properly. That issue has mostly been resolved, but they also discovered manufacturing and software problems that had to be addressed.
The company has since developed a different strategy for how it measures its performance on planes.
“I’m sure everyone on this call has a frustrating Gogo story,” whether it’s having a hard time connecting, an arduous log-on process or just slow performance, Thorne said. “As a board member, I used to complain about all those things all the time and now I get to complain about them as the CEO.”
One of the problems at Gogo was “we measured success by network availability," he said. "In other words, how well the network was reaching the airplane, but we failed to measure the user experience once our signal was on board. We’re changing all of that and rolling out tools to measure network connection times, portal performance and browsing performance in the cabin so we can manage on-aircraft maintenance such as wireless access point outages, coverage shadows or software glitches on our on-board servers.”
Gogo deployed new Gilat modems across the fleet to improve browse times; it’s rolled out 500 and will roll out another 500 before year end. It’s also rewriting the software for its on-board servers to improve the performance.
“Yes, we are having our issues right now, but I really believe the future is bright for this company,” Thorne said in closing remarks. “Passengers want connectivity, airlines want to provide it. Providing connectivity at 36,000 feet and 600 mph is a really hard thing to do and we’re really good at it. … I would say we’re the best at it.”