GoGo Posts 55% Revenue Decline, Makes Further Cuts
GoGo reported consolidated revenue of $96.6 million and a net loss of $86 million in its Second Quarter (Q2) 2020 financial results released on Monday. GoGo, which provides In-Flight Connectivity (IFC) services has been hit hard by the COVID-19 pandemic, but the company’s CEO said global commercial aviation is beginning to recover.
Consolidated revenue of $96.6 million declined by 55% from the same time last year, which GoGo attributed to the impact of COVID-19 on demand for both domestic and international air travel. Of that, service revenue of $74.3 million declined by 57% from Q2 2019, and equipment revenue of $22.4 million declined by 44% from Q2 2019.
Total revenue for the Business Aviation segment decreased to $54.6 million, down 23% from Q2 2019, driven by declines in both service and equipment revenue caused by the negative impact of COVID-19. For Commercial Aviation in North America, total revenue decreased to $30 million, down 72% from Q2 2019. And for Commercial Aviation in the rest of the world, Total revenue decreased to $12.0 million, down 67% from Q2 2019.
GoGo said its net loss of $86 million increased from a net loss of $84.0 million in Q2 2019. Net loss in Q2 2019 included a loss on extinguishment of debt of $58.0 million.
The company has made cuts to deal with the pandemic’s effects, and recently announced a reduction in force of 143 full-time positions predominantly in the Commercial Aviation business, effective August 14. This comes after GoGo announced a four-month furlough of more than half its employees in May, impacting more than 600 employees.
Oakleigh Thorne, GoGo’s president and CEO floated the possibility of selling the Commercial Aviation division.
“While COVID-19 has significantly impaired global commercial aviation travel and our results for the second quarter, we are encouraged by the strong recovery in business aviation as well as the beginnings of a recovery in global commercial aviation which has continued into August,” Thorne said. “Going forward, we are focused on maintaining the strength of our franchise and realizing the value of CA through a potential sale of the division.”
The company did not provide 2020 guidance in either its Q1 or Q2 financial results.