Gogo posts $86M loss, looks to sell business unit

BROOMFIELD — Facing strong COVID-19-related headwinds, Gogo Inc. (Nasdaq: GOGO), a Chicago-based in-flight broadband connectivity firm with a major business unit headquartered in Broomfield, posted net losses in the second quarter of fiscal year 2020 of nearly $86 million. “It certainly was an extraordinary quarter, but for all the wrong reasons. I think we can sum it up like this: If you sell internet on airplanes and no one is on planes, it’s tough to make a living,” Gogo CEO Oakleigh Thorne said Monday during a conference call with investors and analysts.  Last week, Gogo announced that it is eliminating about 145 jobs across its operations, including about 10 in Broomfield. These layoffs come on the heels of a 600-worker furlough in April that impacted about 90 Broomfield employees. The Broomfield operation is home to about 300 workers. “We had to move from furloughs to [reductions in workforce] If we were going to meet our liquidity requirements,” Thorne said.  Gogo booked $96.6 million in consolidated sales for the quarter, down 55% from the same period in 2019. Company officials said the second quarter represents the first time since 2013 that Gogo recorded negative EBITDA, or earnings before interest, taxes, depreciation and amortization. Gogo, Thorne said, has the liquidity necessary to weather the COVID-19 storm and he expects a “steady recovery track for the next several quarters.” Still, Gogo is considering offloading its Commercial Aviation division, which provides WiFi to customers on major airlines. The firm has “launched a formal process to evaluate our strategic options,” Thorne said, and Gogo leaders “feel optimistic that a deal will happen.” Gogo is made up of two divisions: Commercial Aviation and Business Aviation, which serves corporate airplanes. Most of the firm’s Broomfield operation is on the Business Aviation side of the business. Thorne said he expects the Business Aviation segment to bounce back faster than Commercial Aviation.  In the second quarter, Business Aviation accounted for $54.6 million in revenue, down 23% from Q2 2019. The Commercial Aviation unit posted sales of $30 million, down 72% from the second quarter of 2019.   © 2020 BizWest Media LLC
Source: BizWest