American Suing Gogo, Wants Faster Inflight Internet

American has some really old inflight internet installations on their planes, when my internet experience is slow I have to remind myself that they haven’t invested retrofitting planes with the latest-generation ‘air-to-ground’ (ATG4) service with Gogo and they haven’t placed any orders for 2Ku satellite internet (2Ku is faster and more expensive than air to ground).

As Delta transitions to 2Ku hopefully that will also relieve pressure on the air-to-ground network and improve speeds on American. It won’t increase the bandwidth that any plane has, but it might reduce some of Gogo’s network congestion. Improved internet was one of the five priorities I outlined for the airline now that they completed customer-facing integration of US Airways and American.

Andrea Ahles writes that American is now suing Gogo over its internet speed.

The Fort Worth-based company filed a lawsuit in district court in Tarrant County on Friday against Gogo, its current Internet provider for in-flight Wi-Fi, saying it has notified Gogo it has found a faster Internet service. In the suit, American says its contract with Gogo allows it to renegotiate or terminate its agreement if another company other than Gogo offers a better service.

The lawsuit isn’t really over the service Gogo is providing, and that I often get unusable speeds when I fly.


Sometimes I can’t get the speedtest.net website to come up at all, though…

Rather American says ViaSat offers a faster product than Gogo, and so it should be able to terminate or renegotiate.

I haven’t seen American’s contract with Gogo, so I can’t comment on the legal merits of their position outside of public statements which seem to suggest that Gogo can offer a competing proposal since there’s now better technology on the market than what American originally installed.

And no doubt ViaSat does offer better internet than the early generation air-to-ground installs on American’s aircraft. Gogo also offers better internet than those early generation installs — both with faster air-to-ground service, and with satellite service. To date American hasn’t been willing to spend more for either. So it is a strange narrative to suggest that Gogo’s product is inferior when the airline hasn’t been willing to spend to upgrade.

Frequently law suits are about leverage in negotiation. Lawsuits are expensive and time consuming. Most don’t actually make it to a final verdict (Though this should simply be asking for declaratory relief). So it’s possible that American could actually be after terminating its contract, or it could be seeking to leverage Gogo into:

  • Better pricing, demonstrating a credible commitment to go elsewhere. If they have the option to select a competitor, they can get a more competitive price.

  • Better timing, American is late to lock in faster-generation internet from Gogo and they don’t want to be “back of the pack” for satellite internet installs. Gogo might have to push installation of other smaller airline orders down the line in order to accommodate American, which is a major customer and one they might otherwise lose.

Gogo “is allowed to submit a competing proposal” which they intend “to do related to its satellite technology, 2Ku.” Which — depending on the choices made by the airline — can be very fast. (I tested 2Ku onboard Gogo’s own 737 back in November.)

Hopefully this suggests that American will finally improve its internet game, litigation or no, with an increased investment. They were an early adopter of onboard internet and I found that changed my travel life. But they’ve since been surpassed by their major competitors (although United still doesn’t have internet on its full fleet).

US Airways didn’t announce the introduction of inflight internet until March 2012 but they rolled it out quickly including to regional jets. They knew they were’t going to make money offering internet, but they acknowledged they were finally losing ticket sales because customers were booking away onto other airlines who offered the service. We know what it takes to get the airline’s leadership to move on this issue, it seems, and fast, reliable internet does matter to at least the lucrative subset of business travelers.

Meanwhile American is also suing seat supplier Zodiac, but they’ve actually been unable to deliver their product in a timely manner.

Disclosure: Usually disclosures involve what the writer gets from a company they’re writing about. In this case it seemed worth mentioning that Gogo is a service I value enough that I pay ~ $50 a month for their unlimited use plan on American Airlines.

(HT: Brian Sumers)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Do you have any idea how the contract is structured between the airline and Gogo? Of that $50 you pay each month, roughly how much does Gogo keep and how much does AA get?

  2. That’s an interesting strategy — declaratory judgment actions are pretty unusual in contact scenarios. Usually, you just make your decision about what the contract means and if you get sued for breach, you litigate then if you have to. Filing this as a declaratory judgment action suggests that AA thinks the point whether they have an escape hatch is debatable. It’s kind of a cooperative thing to do — we’re at an impasse, let’s submit to the court and see who is right. It’s still a last step when you can’t resolve your differences otherwise, but seems like mostly a negotiation tactic.

  3. Kind of unrelated, but I bought a cheap Chromebook for Xmas (about $75) and discovered it came with 12 free Gogo internet passes — worth way more than the Chromebook itself! I used one this week on an AA flight (a US Airways A321) and the speed was OK. Now I’m thinking it might be a good idea to use those passes sooner than later!

    If I have any gripe with AA’s current Gogo relationship, it’s that the free entertainment they’re providing is poor. My flight had two TV crime shows, with everything else $4 or more. On UA and WN, I’m getting much better free wireless entertainment.

    BTW, I’ve found my Chromebook to be very useful on the road. It’s cheap, lightweight, easy to use and has good battery life. It does lots of things that are difficult to do on a phone.

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