Yesterday’s drama in the in-flight connectivity world reached something of a denouement today. In a transaction which should have been handled behind closed doors something went wrong and AA apparently became impatient, seeking a court order validating its position that it had a viable “out” of its contract with Gogo for approximately 200 aircraft. The additional details came in a formal filing from Gogo with the SEC today:
On February 12, 2016, Gogo sent American a letter seeking further information regarding satisfaction of the conditions set forth in the notice provision, including seeking information relating to the system performance and functionality of the competitive technology, as contemplated by the provision. On the same day, American filed a Petition in Tarrant County, Texas seeking a declaration from the Court that the AA Letter complied with the conditions set forth in the notice provision of the Agreement, thus triggering the 45-day period within which Gogo may provide American with a competitive proposal.
American is a valued customer of Gogo, and Gogo looks forward to presenting a proposal to install 2Ku, our latest satellite technology, on the aircraft that are the subject of the AA Letter. Accordingly, on February 17, 2016, we notified American that we were rescinding our February 12, 2016 letter, that we acknowledge the adequacy of the AA Letter and that our receipt of the AA Letter triggered the 45 day deadline under the agreement for submission of our competitive proposal.
Gogo believes that this stipulation provides American with the complete relief it requests in the Prayer for Relief in its February 12, 2016 Petition, and thus moots the dispute that is the subject of the court action.
Essentially it seems that letters crossed in the ether (or on the ground I suppose; I don’t know if they use email or a paper solution for this sort of communication). And that the delay in Gogo acknowledging and responding caused the situation to go public. Maybe it was a stall tactic to buy a few extra days of service from AA on the Gogo network but that seems a stretch to me. It isn’t all that much money compared to the bloodbath which the company endured on the stock market Tuesday; Wednesday wasn’t so good, either. And a similar hit may have come in the future if AA decides that the 2Ku Gogo counters with is insufficient. But it is hard to believe that would have been worse than what happened this week, all because it took a week to reply to a letter about the contract.
Interested in more in depth coverage of the in-flight connectivity industry? I’m writing (and talking) about it a lot on Runway Girl Network these days, both on the open and premium sections of the site. There’s some really interesting stuff going on there.
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I think you may have misinterpreted what likely happened. According to Gogo’s filing, AA sent it a letter on 2/4 invoking the 45-day notice period. Gogo tried to get cute and sent the 2/12 letter asking questions about the other technology in which Gogo at the very least implied that the 2/4 notice didn’t start the 45-day period. AA saw this letter and filed suit that very day (of course they already had the paperwork ready because they didn’t want Gogo to file suit in a different court first). Gogo now is saying that the February 4 letter it got is notice starting the notice period. Not too smart.
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