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Why Gogo Flew 14% Higher on Tuesday

By Eric Volkman – Jun 30, 2020 at 6:34PM

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Airplanes are quickly filling up, and customers are returning to the company's services.

What happened

Nearly everyone who's visited a U.S. airport has come across the services of Gogo (GOGO 0.83%). The company's specialty is in-flight, high speed internet services. On Tuesday, the stock gained some nice altitude after it published a new set of metrics. 

So what

Gogo said that late last week, its services were available on over 3,000 daily flights. That's a dramatic increase from the valley of its mid-April figure, which was 378. It's also not far away from the company's average of 3,500 in the days before the SARS-CoV-2 coronavirus spread around the world.

A man with a smartphone in an airport.

Image source: Getty Images.

The coronavirus is, naturally, the reason for that steep fall and hearty recovery. When the pandemic seized the world a few months ago, it quickly and effectively brought the travel industry to a virtual standstill. At one point, said Gogo, 30% of its key Gogo Business Aviation accounts either suspended their memberships or downgraded their plans.

Since then, however, 60% of the customers suspending their accounts have reactivated them. Four-fifths of those clients suspending or downgrading have reverted to their previous plan.

Now what

Now, with more states and municipalities reopening -- for better or worse -- airplanes are starting to fill up again. Gogo anticipates that this trend will grow. 

"[W]e're seeing several positive trends taking shape in the market," the company wrote in its press release touting the improved numbers. "[W]e're now in the midst of a measurable recovery as flight activity increases."


Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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