The Stock Likely to Benefit From In-Flight Electronics Use
NEW YORK (TheStreet) -- Gogo
Speaking with Reuters, CEO Michael Small said while the short-term effects will likely be negligible, long-term revenue gains could be significant. Once U.S. airlines relax electronics guidelines, other nations' regulators might follow suit, opening up new markets for the company, suggested Small.
In the near-term, however, Gogo foresees little revenue increase as WiFi has already seen rapid growth in the domestic airline market. The Illinois-based company currently provides internet services for 80% of U.S. commercial aircrafts.
On Monday, the company announced it had agreed to provide internet access to Japan Airlines and the 77 vehicles in its domestic fleet. The deal was Gogo's first major international contract, marking a significant step in its move to become a global company.
Shares are up 2.2% to $19.05 in pre-market trading, adding to increases of 4.5% in Thursday trading. Since its float on June 21, the company has risen 16.5%, outstripping the S&P 500's 10.31% gain over the same period of time.
Written by Keris Alison Lahiff.