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American Goes All In on Faster Wi-Fi

The largest carrier is switching its mainline jets to satellite service—and favoring one provider in particular.

American Airlines Group Inc. plans to install faster Wi-Fi on 500 more aircraft in its domestic fleet, bolstering an earlier order for ViaSat Inc. while dealing a blow to current service provider Gogo Inc.

American has more than 1,100 aircraft with Wi-Fi service, a number the airline said gives it one of the largest Wi-Fi-equipped fleets in the world. ViaSat’s largest North American customer to date is JetBlue Airways Corp., which provides the service to passengers for free through a marketing partnership with Inc.

In June, the world’s largest airline split an order between the two Wi-Fi providers, with ViaSat contracted for service on 100 new Boeing 737 Max planes and Gogo tapped to install its new 2Ku satellite service on more than 130 Airbus A319s and A320s. The ViaSat installations begin in the summer of 2017, while the Gogo additions will begin late next year, American Airlines spokeswoman Martha Thomas said Wednesday.

In early June, Chicago-based Gogo told investors that about 550 American planes with its equipment  “are subject to deinstallation at any time at American’s option.” Gogo also said it expected that American would exercise that right for many, or perhaps all, of those aircraft “from time to time over the next several years.” ViaSat disclosed a large new order with its quarterly earnings report Nov. 8 but declined to reveal which airline, per the customer’s request.

Carlsbad, Calif.-based ViaSat operates its own satellites, while Gogo and Global Eagle Entertainment Inc. contract with other satellite companies.

“Gogo will still be outfitting other aircraft in our domestic fleet with its 2ku satellite Wi-Fi and Panasonic continues to provide satellite Wi-Fi for our international widebody fleet,” Thomas said, adding: “Gogo remains a valued partner.” American uses Panasonic Aviation on more than 60 of its international wide-body aircraft. 

Gogo spokesman Steve Nolan said in an e-mail Wednesday that American’s announcement is “really old news and confirms what we said in our June 3 public statement. It doesn’t change our business outlook and financial guidance.”

Separately, Southwest said late Tuesday that it’s reviewing proposals for a “secondary connectivity provider” to the Row 44 service it has from Global Eagle on its fleet of more than 700 Boeing 737s. Southwest is Global Eagle’s largest customer. The airline said it would have “more to share in the coming weeks,” spokeswoman Michelle Agnew said Tuesday. Southwest hasn’t revealed which companies it’s reviewing for the second service or how much of its fleet would be covered.

Shares of Global Eagle fell more than 12 percent to $7.17 in New York trading. Gogo fell almost 8 percent to $8.91, while ViaSat rose more than 11 percent to $78.45.

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