In September 2014 Aircell, which provides in-flight communications combining air-to-ground (ATG) and satellite communications systems to business aviation, rebranded as Gogo Business Aviation. The business aviation (BA) division sits alongside Gogo’s commercial aviation division, and both divisions are doing exceptionally well. Gogo’s BA revenues grew by 35% in the fourth quarter of 2014, by comparison with the same quarter in 2013. The division contributed service revenue worth US$20.3 million to Gogo’s record fourth quarter results.
Gogo is now on some 2,000 commercial jets and has more than 8,000 systems flying aboard business aircraft. EVA spoke to John Wade, Executive Vice President and General Manager of the rebranded company, about the rebranding and Gogo’s plans for connectivity services on business jets.
Q: It is always a risk when an organisation drops a well-known brand name. What was the rationale for rebranding Aircell as Gogo Business Aviation?
A: It was one of those things we did deliberately, and with a lot of forethought. We took the view that the Gogo brand in the commercial aviation space was very strong and we were seeing operators going to dealers and saying that they wanted the same service on their private jets. This led us to see that the branding around our commercial airline broadband product was much stronger, as Gogo, than the degree of recognition being enjoyed by the Aircell brand in business aviation. We eased into the change by rebranding the products ahead of rebranding the company, and it has worked out very well for us.
Q: For those who are unfamiliar with your in-flight communications and entertainment product lines, can you provide an account of these? It would also be useful to explain the way in which your air-to-ground (ATG) network and your satellite communications capabilities combine to provide these services.
A: Certainly. We have a number of different networks, or options, for bringing connectivity and communications to the cabin. We offer services over satellite, starting with Iridium. This is a global satellite network of 66 active satellites in low earth orbit which allows global coverage with base stations on the ground. Iridium has an exciting next-generation programme called Iridium NEXT, which will consist of an updated constellation of 66 satellites. These will be launched between 2015 and 2017. We are the world’s largest provider of today’s Iridium services in aviation and more than 5,000 business jets take this service from us.
About six years ago we introduced our Gogo Biz broadband product to the US, which provides several megabits of connectivity to the aircraft. There are currently around 3,000 business jets that take this service, including operators like Avjet and JetSuite as well as NetJets, the biggest fractional operator in the world. We also offer services based on Inmarsat’s SwiftBroadband satellite service, and for this we are a reseller of AVIATOR Satcom terminals from Cobham and we are a SwiftBroadband service provider. The whole idea now is that Gogo is a one-stop shop for virtually all communications products to the aircraft. This includes everything from cockpit safety services to in-cabin broadband, internet, in-flight entertainment and voice services. We do everything on the aircraft, from the handsets to the router.
Q: You recently introduced a new router product, the UCS 5000, which doubles as a media server for your Gogo Vision product. How does having a library of films stored on the server compare and compete with streaming movies? Don’t people prefer to have access to Netflix or some other streaming movie provider?
A: The whole idea of the UCS 5000 router is to simplify connectivity for passengers and crews. One example is allowing you to move seamlessly from air-to-ground connectivity to satellite broadband without having to manually switch between systems, because you are out over the ocean, for example. We have been able to add very substantial storage and movie streaming capabilities to the router so that we can provide Gogo Vision in-flight entertainment and information service as an option for customers. Gogo is now the world’s largest streaming IFE company. Today we have some 1,500 aircraft streaming wi-fi video from the UCS router to end user devices.
Much is made of the potential for in-flight watching of films streamed over broadband from terrestrial providers like Netflix, but what I tell people is that with the cost structure associated with data streamed to aircraft, it would almost be cheaper to make the movie than to watch it via streaming video. Having a large library of recent releases cached on the aircraft is orders of magnitude less expensive for end users, so why would you not go for that option rather? There is a lot of controversy over the legality of movie content on servers on business jets. With Gogo Vision operators know that they are on a secure footing. We do all the digital rights management (DRM) with the various studios and we work with them so that we are able to provide their latest releases as soon as they become available for home viewing. Because we take care of everything the operators of business jets do not have to worry about the Hollywood cops or the Bollywood cops descending on them over licensing issues. They know that they are in compliance and everything is as it should be. Actually this is not an easy thing to do. There is quite a bit of work required to get the digital rights signed off. The studios have to evaluate your entire infrastructure to make sure that there is no risk of decrypted movies finding their way onto the black market. We work with the studios to make sure that they are comfortable.
One of the great things about our on-board router is that we update the content of the entertainment library wirelessly as soon as the aircraft lands at one of the FBOs that we have an arrangement with. Right now we have an arrangement with Signature Flight Support, so at its various FBO locations, while your aircraft refuels the server looks for the Gogo cloud access point and starts downloading the video updates. This means that there is no need for technicians to go chasing after the aircraft to provide a manual feed of the latest releases, news content and so on. Operators can also soon have the update service provided direct in their own hangars.
For Gogo Vision, operators pay a flat monthly subscription plus a fee for each movie or TV episode they watch