American Airlines is suing Gogo, the provider of its onboard internet on most domestic flights, because the company's offering is not fast enough, the Fort Worth Star-Telegram reported on Monday.
According to the newspaper, American is arguing its long-term contract allows it to reopen the bidding for in-flight WiFi if one of Gogo's competitors develops a much better product. In court papers cited by the Star-Telegram, American says Gogo competitor ViaSat is selling an "in-flight connectivity system that materially improves on Gogo’s air-to-ground system."
This is a complicated issue, and I'm sure we will hear about it more later this week. By most measurements, ViaSat's satellite-based system, which is used by JetBlue, United and, on some planes, Virgin America, is faster and more dependable than Gogo's air-to-ground system, which relies on ground-based cell towers.
But Gogo will soon come to market with its own satellite-based system called 2KU, so if American wants speedier its connections, it doesn't have to leave Gogo. Delta will install that system on some planes soon. Gogo told the Star-Telegram it believes "...2Ku is the best performing technology in the market" and suggested it is trying to sell it to American.
Also, remember ViaSat is not perfect either. For the near future, until a new satellite is launched, ViaSat does not offer much coverage beyond the Continental U.S. This is why Virgin America's Hawaii flights lack WiFi. It is also why United's 737 coverage map looks like this:
It remains to be seen whether American actually wants to leave Gogo before its contract expires, or whether American is filing suit to exert some pressure on the company for another reason. Perhaps it wants a better deal on the new 2KU service.
What do you think is American's next move?