Could Gogo's sale to Intelsat actually make your inflight Wi-Fi better?

The novelty of accessing the internet from a metal tube soaring through the sky at 500 miles per hour has long been lost on frequent flyers. Now, the question isn't whether or not your flight will offer Wi-Fi, but how much it'll cost and whether or not it'll actually work.

Recently, a number of top internet providers have worked aggressively to update their offerings — at least partially in response to relative newcomer ViaSat, which continues to roll out new satellites and offers pricing competitive enough for some carriers to offer Wi-Fi service for free.

Gogo has been one of the companies feeling the ViaSat burn. The internet provider launched its commercial inflight product with Delta in 2008, onboard a handful of the airline's since-retired MD-88s, along with a Boeing 757. On many planes, the technology at play is largely the same today.

Read more: How does in-flight Wi-Fi really work?

At the time, Gogo's press release advertised compatibility with "personal digital assistants" — while the company's low-cost air-to-ground (ATG) system might be sufficient for checking email on a Palm PDA, it doesn't really cut it with a plane full of laptop-wielding road warriors expecting to have a productive day in the air.

That led Gogo to move on from ATG, which utilized special cell towers on the ground, in favor of a much-improved satellite-based alternative, called 2Ku. The system uses a special antenna to connect to Ku-band satellites, offering speedy coverage during 98% of flight routes with a slim top-mounted design that avoids creating extra drag, resulting in fuel savings for the airline.

2Ku is a promising solution, and could have provided Gogo with the lifeline it needed to succeed. And then the pandemic hit.

Investing in new technology to appease business travelers is no longer a priority — there aren't any business travelers at the moment, and, in the meantime, the satellite industry continues to advance, leaving a major player to look elsewhere in an attempt to survive.

Fortunately, it seems Gogo has found a new home. Satellite company Intelsat has agreed to acquire Gogo's commercial aviation business for $400 million in cash, in a deal that should close in the first quarter of next year. Intelsat is on shaky ground itself, though, having filed for Chapter 11 bankruptcy protection in May.

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Following the deal, Gogo will remain an independent, publicly traded company, shifting its focus to business aviation, and the latest version of its air-to-ground network, Gogo 5G. It's just GoGo's commercial inflight Wi-Fi business that will shift to Intelsat.

$400 million may seem like a small price to pay for a satellite internet company — a single satellite can easily cost that much, once you factor in launch expenses, and Gogo would need a whole network of them to provide global coverage. Gogo, however, doesn't have valuable assets — the company doesn't own any satellites, opting instead to rent bandwidth from partners.

Related: You’ll now have more time to use Gogo Wi-Fi on many flights

What Gogo does have, however, is a competitive product, and contracts with major airlines around the world, including Delta and Air Canada. A number of TPG staffers have had great experiences using 2Ku, as I did on a 2016 demo flight — it's a huge step up from the dated ATG product that earned the company a less-than-stellar reputation.

While Gogo was already on the way to improving its product and reputation, thanks to 2Ku, having a large satellite provider's backing could add some financial stability, assuming Intelsat emerges from Chapter 11 relatively unscathed.

One of Gogo's biggest challenges at this point appears to be its backlog — some 1,400 aircraft are slated to get 2Ku connectivity, but don't yet have it installed.

Once those planes are online, Gogo promises "peak" speeds of 70+ Mbps, which theoretically makes it possible to stream HD content during a flight, and perhaps even participate in Zoom video calls, if an airline permits.

Most exciting, however, is Intelsat's existing infrastructure — namely, a large network of satellites offering coverage of much of the globe, including a number of Galaxy-branded Ku-band satellites covering North America.

According to Intelsat, "Passengers will benefit from an enhanced in-flight connectivity experience that delivers fast and reliable video streaming, browsing and cloud-based applications from gate to gate. Airlines can expect a fully integrated platform offering high reliability, flexibility and passenger satisfaction."

With Gogo and its satellite provider now working hand in hand, the service will no longer be vulnerable to limited-time agreements, or conflicting interests with satellite companies looking to enter the commercial aviation space. Intelsat will be invested in Gogo's success, which should enable the duo to provide a speedy, reliable, affordable product to airlines and their customers for years to come.