In-Flight Internet Provider Gogo (GOGO) Positioned for Major Growth

Jacob Harper |

On Dec. 2 shares of burgeoning wireless internet provider Gogo Inc. (GOGO) skyrocketed, gaining nearly 17 percent in early trading on news the company had secured a lucrative installation contract with aircraft manufacturer Boeing ($BA). The stock pop reflects investor excitement over the resulting increase of wireless in-flight entertainment, and the inevitable end of flights without internet access.

All New Boeing 747-400s to Feature Gogo

Gogo will be installing Ku-satellite technology on all new Boeing 747-400 planes, the best-selling model of Boeing airliners. The new satellite installations will specifically address internet connectivity issues that arise in transoceanic flights, one of the few places left on earth that remain firmly out of the reach of wi-fi.

As the insatiable appetite for constant connection continues unabated, Gogo is reaping the profits. The company is at the forefront of airline internet solutions, and has scored several major deals over the past year to bolster their profile.

The $2.62 billion market cap Gogo scored a deal with Delta (DAL) in July 2012 to outfit that company’s existing 757 planes – which handle most of the exceptionally long flights for the carrier – with satellite-based internet.

Gogo Shares Soaring Since IPO

Gogo has been on a tear since going public in June 2103, nearly doubling in price from its $16 a share IPO offering. And as Gogo scrambles to fulfill consumer demand, investors are scrambling to get a stake in the company.

The company will try to lure additional investor capital at the JP Morgan Chase and Co. (JPM) Small-Mid Cap Conference on Dec. 10, and the following day at the UBS (UBS) Global Media and Communications Conference, where they will make their case for increased profitability in the coming year.

Gogo certainly has plenty of room for growth, as their service is currently available on just 2,000 commercial airplanes. According to the FAA, at the end of 2011 there were approximately 7,185 commercial aircraft in operation.

On news of the Boeing deal, Gogo jumped 16.85 percent by midday, hitting $31.13 a share.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
BA Boeing Company (The) 135.84 -0.34 -0.25 2,539,711
DAL Delta Air Lines Inc. 41.46 0.56 1.37 14,613,524
GOGO Gogo Inc. 10.73 -0.22 -2.01 513,934
JPM JP Morgan Chase 68.26 -0.09 -0.13 14,122,005
MPVR MP Ventures Inc n/a n/a n/a 0
UBS UBS Group AG Registered 13.64 -0.07 -0.51 2,153,857


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