American Airlines has filed a lawsuit to ditch its longtime in-flight internet provider, Gogo. In the world of corporate relationships, even if you find that “alternative services providers are offering faster, more reliable and less expensive satellite-based wifi,” a court has to agree to make the separation complete.
In the suit, American makes clear that it’s playing the same sport so many of its passengers do when they choose Delta: They want to switch to a carrier that’s cheaper and offers better service.
“After carefully evaluating the new technology and services in the marketplace, American has decided to exercise its rights under the Agreement and recently notified Gogo that ViaSat offers an in-flight connectivity system that materially improves on Gogo’s air-to-ground system,” the suit says. The Star-Telegram first reported news of the lawsuit.
In-flight wifi has become a major selling point for consumers shopping around between airlines, and American thinks that Gogo’s service is harming its reputation. As many as 66 percent of consumers consider wifi access when choosing a flight, according to a survey American cites in the suit.
While many airlines are shifting to satellite-based wifi, American has remained tethered to Gogo’s ground-based system. But Gogo has recently rolled out 2Ku, a new satellite-based wifi system already in use by a Aeromexico and a Japanese airline. Gogo is permitted to counter American’s initial lawsuit with a proposal to upgrade the existing system to 2Ku.
“We believe that 2Ku is the best performing technology in the market and look forward to discussing our offer with American,” Gogo said in a statement to The Star-Telegram.
The court may even order American to give the new service a shot before dropping the contractual linkage altogether. 2Ku has received mixed reviews from tech journalists, but it does seem like a clear improvement over the old system.
Ironically, the lawsuit could turn into a win for Gogo if the court orders American to upgrade its system, providing a high-profile test of its new technology and roping American into a new, long term deal.
Apparently though, the market is betting against Gogo, as the company’s stock has lost more than a quarter of its value since news of the lawsuit broke.
“We have no comment on the merits of this litigation, but we would like to note that American is a valued customer of ours and that we look forward to resolving the disagreement regarding contract interpretation that led to this declaratory judgment action,” Gogo said.