NOT GOOD TO GOGO

Posted on 02/18/2016

American Airlines has filed a lawsuit to end its contract with its in-flight Internet provider Gogo because of Wi-Fi speeds on its planes.

American claims a clause in its 2012 contract with Gogo allows it to switch providers without penalty before the expiry date if a rival provider offers product that “materially improves” on the service."We continually evaluate the in-flight connectivity service we provide customers to ensure it is meeting their needs and wants," said American spokesman Casey Norton."We've notified Gogo of a competitor's offering and we will evaluate all our options."Gogo says it has the right to offer a counter proposal to match any competing service. In a statement the internet service provider said, "American is a valued customer of ours. We look forward to resolving the disagreement regarding contract interpretation that led to this declaratory judgment action." Gogo is the largest provider of commercial airline Internet connectivity in the US, however it uses ground-to-air technology rather than the faster satellite-based tech now available.American says it plans to switch to the satellite-based ViaSat system, which is used by United Airlines, JetBlue and Virgin America.American's current contract with Gogo is due to expire in 2018.Gogo shares dropped by 28 percent while ViaSat was up by more than 10 percent.