What happened

Shares of aviation broadband provider Gogo (NASDAQ:GOGO) surged on Wednesday after the company announced success with its efforts to protect against de-icing fluid, and raised its full-year adjusted EBITDA guidance to reflect the absence of certain costs related to the problem. This comes about a month after the company last provided an update on its efforts to avoid contamination by de-icing fluid. The stock was up about 16.8% at 11:10 a.m. EST on Wednesday.

So what

As of Dec. 31, the modifications on Gogo's 2Ku North American aircraft to protect against de-icing fluid have worked, according to the company. They have been installed on 675 aircraft as of the end of 2018, or about 97% of the installed North American fleet. The company has experienced no incidents of 2Ku system degradation on the modified aircraft through Dec. 31. The availability of Gogo's 2Ku fleet was 98% in December, up from 90% during the prior-year period.

A plane with the Gogo logo.

Image source: Gogo.

Because of this success, Gogo said that it did not incur certain predicted costs associated with further de-icing efforts in the fourth quarter. So the company raised its 2018 adjusted EBITDA guidance to the high end of its previous guidance range of $45 million to $60 million to reflect those lower costs.

Gogo plans to install the 2Ku modifications on international aircraft through each airline's maintenance program, even though most de-icing occurs in North America.

Now what

While Gogo is profitable on an adjusted EBITDA basis, the company is not profitable based on net income or free cash flow (FCF). Through the first nine months of 2018, Gogo posted a net loss of $102.3 million and an FCF loss of $199 million. Net income improved a bit from the prior-year period, but FCF worsened slightly.

Boosting fleet availability via successful de-icing modifications is certainly good for the company. But Gogo is still far from being profitable.

Check out the latest Gogo earnings call transcript.