Gogo Soars After American Airlines Withdraws Legal Action

  • In-flight Internet provider's stock closes up 10% in New York
  • American will continue to shop for better Wi-Fi service

Shares of Gogo Inc. soared after the company ended a legal dispute over contract terms with American Airlines Group Inc., though the airline is still considering a switch to a competitor for in-flight Wi-Fi service on about 200 planes.

Gogo rose 10 percent to $11.05 at the close in New York, the biggest single-day gain in more than three months, after the Chicago-based company said American will no longer pursue legal action.

Earlier this month, American had filed the action in a Texas district court asking a judge to protect its right to terminate its Gogo contract if the airline secured a better Wi-Fi service offer. American is considering Gogo’s competitor ViaSat Inc. for faster, cheaper service. The contract gives Gogo a chance to prove to American that it can beat competing offers.

American spokesman Casey Norton confirmed that the Fort Worth, Texas-based airliner won’t pursue the case.

“Gogo can submit a proposal and we will evaluate their proposal when we receive it,” Norton said.

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