GoGo revealed news of the legal action in a filing with yesterday with the Securities and Exchange Commission, noting that the company had been sued on Friday, Feb. 12 by American regarding a provision in its contract with the airline.
That provision gives American a possible way out of its deal with GoGo “if a competitor offers connectivity services that materially improve on the Gogo early generation air to ground system that American has chosen to use on certain fleets.”
The airline is obligated to notify GoGo and give the company a chance to submit a competing proposal. If that proposal doesn’t meet American’s standards, the airline has the option to terminate the contract, which would affect around 200 aircraft, mostly Boeing 737s.
American told GoGo in early February that a competing service offered by ViaSat, and GoGo says it intends to come back with proposal to upgrade this fleet with faster service, but not before American filed a lawsuit last week in a Tarrant County, TX, court.
“American continually evaluates in-flight connectivity service to determine what best meets our customers’ needs and wants,” American told the Fort Worth Star-Telegram. “We’ve notified Gogo of a competitor’s offering, and we will evaluate all of our options.”
In addition to the faster speeds that ViaSat might offer to American, the Dallas Morning News points out that the new provider would give the airline more leeway in what it charges passengers for inflight access. While GoGo generally shares its revenue with the airlines, the satellite providers simply bill the airline as a vendor, leaving the carrier to decide how much it wants to charge for Internet access.