The last two years have been outstanding for Gogo Business Aviation. The company has grown at a tremendous rate – over 26% year on year for 2015, with the 2016 figures yet to be released, but generally expected to show similarly strong and sustained growth. And now, as Gogo Business Aviation’s Senior Vice President and General Manager, Sergio Aguirre, notes, the company is about to underscore the fact that it is a global, rather than just a US player.
To this end, Gogo will be making a major announcement at EBACE about its new, global 2Ku-band network, which adds hugely to its well-known air-to-ground (AtG) communications offering. The AtG network transformed the cost structure for cabin connectivity in both commercial and private jets, and the 2Ku network will enable Gogo to extend its services globally while driving down connectivity costs for passengers on private jets as well as for commercial airlines.
Q: Sergio, before we look at the new Ku-band option which will extend the range of services Gogo is able to offer to European, Middle East and Asian clients, tell us a bit about how things have moved on over the last two years for you and the company.
A: The most important, and the most humbling thing for us is that the market has responded very well to our offerings and has displayed a huge appetite for cost-effective streaming entertainment and connectivity capabilities in the cabin. Our customer base has placed a very high level of confidence and trust in us, which is tremendously gratifying. At the same time, we feel that given our track record, we have earned this, since we have broken all previous business models on IFE and connectivity and made our systems very affordable to all segments. We now have over 7,000 aircraft, both commercial and private, flying with Gogo streaming services onboard and Gogo voice, data and text services from your own smart phone.
When I say, “streaming services”, you cannot provide a sensibly priced actual streaming service to an aircraft in flight yet, since your fees to the content providers would be massive. The way we get around this is to stream the latest movie releases, as they become available, even before they are available on DVD, direct to the aircraft every time they land at one of the many FBOs that take our streaming update service. We have negotiated agreements with all the major film studios so we are able to offer this service at an excellent rate to our customers.
This is our Gogo Vision service and our ground based infrastructure allows us to provide rapid content updates for our IFE system. This automatic refresh of new media content takes a tremendous load off whoever is responsible for the aircraft, since the onboard media server is always kept up to date without them having to do a thing, and hundreds of titles – including all the latest Hollywood blockbuster releases, are there for the passengers to select.
Q: I believe you have a 10 Mbps connectivity service to the cabin?
A: Yes, this service is now certified and we will be taking it to the market in the next couple of months. There is huge demand for it and we expect it to do very well. What is absolutely key for us though, particularly in Europe and the Middle East, is the fact that we have now completed the roll-out of our global 2Ku-band network. Th is is very crucial for commercial airlines since it allows them to start providing internet connectivity to the cabin on European regional and international flights. It is also tremendous for VIP aircraft. We have secured a launch customer on an Airbus 319 and the installation on that aircraft began in the middle of April. Th e customer will take delivery of this VVIP aircraft towards the end of May and we will be announcing all the details at EBACE.
Q: What sort of speeds do you think you will be delivering to the cabin?
A: Right now, what we are saying to customers is that the service will deliver around 50 Mbps to the cabin. However, when the high throughput satellites come onstream, we anticipate 200 Mbps to the cabin. Already, with the existing service what we are seeing in testing is speeds in excess of 100 Mbps. So the reality is far exceeding our expectations. We already have the service on quite a few commercial aircraft in advance of the main launch.
Q: Is this a partnering arrangement that has allowed you to bring the 2Ku service to market?
A: This is a proprietary Gogo world-wide network, compiled and built by us, utilising satellite services from SCS Technologies and Intelsat, and is a service fully managed by us. We provide the hardware and the service and support, while subcontracting hardware manufacture to Cincom. We do all the final assembly and testing. Because of our Air-to-Ground (AtG) network across the continental USA, people tend to think of Gogo as a US-based service. In fact, even before the launch of our new 2Ku-band service, we had customers in over 60 countries, with literally thousands of international customers. We already have a strong presence in Europe and the Middle East, with staff in locations around Europe in both support and sales.
With Gogo Vision we are able to address the needs of our international customers by offering them a choice of seven languages both for the films and for the user interface. So we already have a very good international story to tell, and it will get even better with our 2Ku service.
Q: Is this only for large jets or can you cater to smaller jets as well?
A: With Gogo Vision, you have a solid state server on board so you do not need internet connectivity to drive the IFE system. So we are able to provide the small jet market with the latest technology as far as in-flight movies and TV shows are concerned, without the need to connect from the sky. In fact as far as IFE is concerned, most of our customers, both operators and owners, are flying smaller jets and they are very appreciative of the fact that we can provide IFE without them having to pay hundreds of thousands of dollars for expensive connectivity.
Q: If they want connectivity though, do smaller jets still have problems, since the antenna required to bring satellite connectivity to the jet are still too large and cumbersome for smaller aircraft?
A: The physics of satellite-based communications is still an issue, but we invest tens of millions of dollars every year in technology that will be crucial to opening up high speed, global connectivity for all segments. We hope to be making some announcements in the near future that will see us able to bring connectivity to the smaller jets.