Gogo Business Aviation's 5G Program Achieves Key Milestones
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The approval of Gogo's AVANCE LX5 system by the FAA is a pivotal development for the company, potentially enhancing its product portfolio and competitive edge in the in-flight connectivity market. This advancement could lead to increased adoption among business aircraft operators, thereby potentially boosting Gogo's market share and revenue streams. The ability to pre-provision for Gogo 5G indicates a strategic move to secure early adopters, which may positively affect the stock's performance as the market anticipates uptake post-launch.
However, investors should consider the capital expenditures associated with the development and deployment of 5G technology and weigh it against the expected future cash flows from the new service. The market's response to the launch, including the pace of adoption and the operational efficiency of the new system, will be critical factors in evaluating the long-term return on investment.
The in-flight connectivity sector is rapidly evolving, with demand for high-speed, low-latency internet services on the rise. Gogo's move to introduce a 5G solution, which promises to outperform existing GEO satellite and ATG solutions, could set a new industry standard. The technical specifications, such as average speeds of ~25 Mbps and peak speeds of 75-80 Mbps, are significant as they suggest a substantial improvement over current offerings.
Moreover, the streamlined installation process, leveraging the same form factor and connections as the existing L5 system, is likely to lower barriers for adoption among current customers. This backward compatibility is a strategic approach to customer retention and upselling.
The transition to 5G connectivity in the aviation sector represents a substantial technological leap. The reported low latency and high throughput are critical for supporting the bandwidth-intensive applications that modern business travelers require. The mention of 'multi-band (MB13) 5G antennas' suggests a robust infrastructure capable of delivering consistent service, which is a technical advantage in the competitive landscape.
The need for a minor STC modification once the 5G chip is available indicates ongoing regulatory compliance, which is essential for maintaining the credibility and safety standards of the new service. The adoption rate of the LX5 system post-launch will be an important metric to monitor, as it will provide insights into the operational success of Gogo's 5G strategy.
Gogo AVANCE LX5 Receives STC and PMA
"Receiving formal approval from the FAA to produce and manufacture the AVANCE LX5 Line Replaceable Unit (LRU) reaffirms our commitment to Gogo 5G as we march toward our launch date," said Sergio Aguirre, president of Gogo. "We built LX5 on the AVANCE platform as a smaller, single-box option to make the installation of Gogo 5G even easier for customers."
The first-article STC for the onboard 5G system was completed by Duncan Aviation's Engineering & Certifications Services team on a Citation Excel aircraft. Gogo's dealer network and OEM partners are actively pursuing multiple STCs that will certify the Gogo AVANCE LX5 system for installation across a variety of business aircraft models. Once the 5G chip is available, a minor STC modification will be required before customer installations of the LX5 can begin.
Gogo 5G is expected to provide ~25 Mbps on average, with peak speeds in the 75-80 Mbps range, outperforming any competitive geosynchronous (GEO) satellite or air-to-ground (ATG) solution. Intentionally engineered to deliver high throughput with very low latency for multiple users, Gogo 5G will meet the increased demand for data-heavy services and applications being used today and those coming in the future.
The LX5 was designed with the same form factor and same connections as the L5 to help streamline installation. Customers can pre-provision for Gogo 5G today by installing the multi-band (MB13) 5G antennas and an AVANCE L5 LRU. The L5 system will operate on the Gogo Biz 4G network until Gogo 5G launches, which is expected in the third quarter of 2024. At that time, they will be eligible to receive a free LX5 to swap with their existing L5 LRU.
The full network of authorized Gogo dealers and AVANCE installation rebate opportunities are available at www.gogoair.com.
About Gogo
Gogo is the world's largest provider of broadband connectivity services for the business aviation market. We offer a customizable suite of smart cabin systems for highly integrated connectivity, inflight entertainment and voice solutions. Gogo's products and services are installed on thousands of business aircraft of all sizes and mission types from turboprops to the largest global jets, and are utilized by the largest fractional ownership operators, charter operators, corporate flight departments and individuals.
As of September 30, 2023, Gogo reported 7,150 business aircraft flying with its broadband ATG systems onboard, 3,784 of which are flying with a Gogo AVANCE L5 or L3 system; and 4,395 aircraft with narrowband satellite connectivity installed. Connect with us at www.gogoair.com.
Cautionary Note Regarding Forward-Looking Statements
Certain disclosures in this press release include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding our business and financial outlook, capital allocation strategy and plans and other financial and operating information. When used in this discussion, the words "anticipate," "assume," "believe," "budget," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "future" and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this press release.
Forward-looking statements reflect our current expectations regarding future events, results or outcomes, including the launch of AVANCE LX5 and Gogo 5G. These expectations may or may not be realized. Although we believe the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, our ability to develop and deploy Gogo 5G or other next generation technologies; the ability of our subcontractor to remedy the error in the non-5G component of the chip, which has delayed the deployment of Gogo 5G to its expected launch date; our ability to deliver the expected performance capabilities of any new technology, including, without limitation, AVANCE LX5; and other events beyond our control that may result in unexpected adverse operating results.
Additional information concerning these and other factors can be found under the caption "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission on February 28, 2023, and in our quarterly reports on Form 10-Q as filed with the SEC on May 3, 2023, August 7, 2023, and November 7, 2023.
Any one of these factors or a combination of these factors could materially affect our financial condition or future results of operations and could influence whether any forward-looking statements contained in this report ultimately prove to be accurate. Our forward-looking statements are not guarantees of future performance, and you should not place undue reliance on them. All forward-looking statements speak only as of the date made and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
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SOURCE Gogo Business Aviation
FAQ
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