Some airlines could slow their rollout of WiFi and increase passenger charges as inflight Internet provider Gogo revamps its business model to remove subsidies for installing and maintaining the technology.
Gogo CEO Oakleigh Thorne says the company will "eliminate or materially reduce subsidies that we offer airlines in all future deals" – a move which will see airlines paying more to outfit their fleets with WiFi.
"The subsidy model has led to our entire industry suffering significant losses, and it was started by us when we first got into the commercial aviation market in the mid-2000s," Thorne recounts, describing the new approach as a "significant pivot in our model."
Gogo powers Virgin Australia's domestic and international WiFi services as well as those of several overseas carriers, including American Airlines, British Airways, Delta Air Lines and Japan Airlines.
Airlines which have already ordered connectivity systems from Gogo could find themselves losing out on the subsidies they had previously agreed upon, reports Aviation Week, with Thorne admitting that Gogo was “planning to have some conversations with our airline partners around that.”