In-flight internet provider gogo filed the necessary papers to raise $1MM in an IPO last week. Yeah, it was the last business day before Christmas so perhaps they hoped people wouldn’t be paying too much attention, but that’s rarely the case. Of all the numbers, perhaps the most significant in their filing is the uptake rate, a number that the company has been loathe to release previously. And now it is pretty clear why.
A quick bit of analysis from APEXMary and NYCAviation suggests that the uptake rate is <5%. Yikes!
To be fair, there are plenty of aircraft operating on routes that are simply too short for there to be any reasonable demand. That isn’t going to help the uptake numbers at all. But they’re quite proud of the number of planes with the system installed so they need to account for that. And the cost to equip the smaller planes is not likely particularly cheaper than the cost for the big planes. And they’ve got most of their airline partners locked in to 10 year contracts, to there is plenty of time to continue growing the revenue.
Another interesting number is that they are realizing about $0.41 per passenger. The good news is that this number is a huge increase over the $0.26/passenger for the same period the previous year.
Also interesting is that about half of their revenue (though mostly on the equipment side, not the services side) is from business aviation. And that side of the business realizes about $1,800/month in revenue per aircraft.
The company has grand plans and a pretty solid technology path for going forward. But it remains to be seen if they can keep the growth up long enough to actually become profitable. Raising $100MM from the IPO will certainly help extend the timeline to realize such, but the new technology implementations are going to be capital intensive again so that will likely be a challenge to those numbers.
Plenty of interesting data to mull over this holiday season.
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