Why Gogo Inc. Shares Jumped Today

The in-flight Internet provider successfully defended its partnership with American Airlines.

Evan Niu
Evan Niu, CFA
Feb 22, 2016 at 3:45PM
Technology and Telecom

What: Shares of Gogo (NASDAQ:GOGO) jumped today, up by 11% as of 2:57 p.m. ET, after American Airlines (NASDAQ:AAL) dropped its lawsuit to switch providers.

So what: Gogo took a hit last week when American said it was considering switching to rival ViaSat (NASDAQ:VSAT) for in-flight connectivity and entertainment options. At the time, Gogo assured investors that it had the opportunity to submit a competing bid and that the aircraft in question were simply using older technology.

Now what: The company was confident that it could submit a competitive bid and defend the contract. It appears that Gogo has done just that, as the company has announced that American dismissed the declaratory judgment action that it had filed. For now, Gogo has retained the lucrative partnership with the airline.