Gogo, which specializes in in-flight Internet connectivity, announced a corporated restructuring aimed at transforming its business model and cost structure.
Oakleigh Thorne, President and CEO of Gogo, said, "The initiatives we are executing under our Integrated Business Plan demonstrate our commitment to taking aggressive action to position Gogo for sustainable value creation. Gogo 2020 represents a new era for Gogo with a significantly reduced cost structure, much lower capital expenditures, and a streamlined and standardized approach to meeting the needs of our customers with improved quality and service. As we prioritize resources to strengthen the resiliency of our model, we remain focused on accomplishing our objectives without sacrificing our long-term growth opportunities and will continue to evaluate strategic options to drive revenue, monetize assets and realize the significant value of our business."
The Gogo 2020 plans calls for ,aterially reducing upfront equipment subsidies for airline contracts and reducing total operating spend in Gogo's Commercial Aviation "CA" business (excluding satellite costs) by nearly 20% by the end of 2020.
Gogo said it is reviewing strategic alternatives, including opportunities suggested by various strategic and financial parties, with the goal of maximizing shareholder value.
Gogo also updated its 2018 guidance as follows:
- Total revenue of $865 million to $935 million, in line with prior guidance;
- 2Ku incremental aircraft on-line to be at the low end of the prior guidance range of 550 to 650;
- Gross capex of $150 million to $170 million and cash capex of $110 million to $130 million, in line with prior guidance;
- Adjusted EBITDA guidance of $35-45 million.
