Gogo Announces Record Results and Updates 2022 Guidance

Gogo Inc. (“Gogo” or the “Company”), the world’s largest provider of broadband connectivity services for the business aviation market, announced its financial results for the quarter ended June 30, 2022.

Q2 2022 Highlights

• Gogo announced its plans to launch the first low earth orbit (“LEO”)-based global broadband service in business aviation (“Global Broadband”) using an electronically steered antenna designed with Hughes Network Systems and a LEO satellite network operated by OneWeb.
• Record total revenue of $97.8 million increased 19% compared to Q2 2021 fueled by strong growth in both service and equipment revenue.
  • Record service revenue of $73.1 million increased 13% compared to Q2 2021 and 3% compared to Q1 2022.
  • Equipment revenue of $24.8 million increased 41% compared to Q2 2021 and 12% compared to Q1 2022.
• Total ATG aircraft online (“AOL”) reached 6,654, an increase of 10% compared to Q2 2021 and 2% compared to Q1 2022.
  • Total AVANCE units online grew to 2,893, an increase of 40% compared to Q2 2021 and 7% compared to Q1 2022. AVANCE units comprised more than 43% of total AOL as of June 30, 2022, up from 34% as of June 30, 2021.

• Average Monthly Revenue per ATG aircraft online (“ARPU”) of $3,328 increased 1% compared to Q2 2021 and was flat versus Q1 2022.
• Net income from continuing operations increased to $22.0 million compared to a net loss from continuing operations of $66.4 million in Q2 2021, primarily due to a loss on extinguishment of debt and settlement of convertible notes of $79.6 million recorded in Q2 2021.
  • Basic earnings per share from continuing operations in Q2 2022 was $0.18. Diluted earnings per share from continuing operations was $0.17.
• Adjusted EBITDA⁽¹⁾ of $41.2 million, which includes $1.2 million of expenses related to Global Broadband, increased 12% compared to Q2 2021 and decreased 4% compared to Q1 2022.
• Cash provided by operating activities from continuing operations of $26.4 million in Q2 2022 increased from cash used in operating activities of $15.0 million in the prior year period primarily due to the timing of interest payments.
  • Free Cash Flow⁽¹⁾ was $15.5 million compared with negative $24.7 million in the prior year period due to the timing of interest payments partially offset by an increase in capital expenditures primarily tied to Gogo 5G.
  • Cash and cash equivalents totaled $164.0 million as of June 30, 2022 compared to $152.8 million as of March 31, 2022.

“Customer excitement is growing as we prepare for the launch of Gogo 5G, which will provide a 5-10x bandwidth improvement for current Gogo customers,” said Oakleigh Thorne, Chairman and CEO. “With the announcement of our Global Broadband initiative, we continue to leverage our AVANCE platform to provide an easy upgrade path for aircraft of all sizes to further boost performance and expand our addressable market.”

“The strength of the BA market combined with solid execution drove record performance in the quarter, positioning us well for continuing revenue and Free Cash Flow growth,” said Barry Rowan, Gogo’s Executive Vice President and CFO. “Based on our continuing strong performance we are raising several key elements of our guidance, including 2022 revenue; 2022 Adjusted EBITDA at the high end of our range in spite of $9 million in strategic investments and litigation expenses; and our long-term revenue growth rate, based on the contribution from our Global Broadband initiative.”

The Company updates its guidance for 2022 as follows:

• Total revenue at the high end of the previously guided range of $390 million to $400 million.
• Adjusted EBITDA⁽¹⁾ at the high end of the previously guided range of $150 million to $160 million, which includes a combined $9 million of estimated litigation expenses and estimated operating expenses for Global Broadband, which were not reflected in the initial 2022 guidance range.
• Free Cash Flow⁽¹⁾ of $35 million to $45 million, which includes capital expenditures of approximately $65 million of which approximately $50 million are tied to Gogo 5G (no change to prior guidance).

The Company updates its long-term targets as follows:

• Revenue growth at a compound annual growth rate of approximately 17% from 2021 through 2026, with Global Broadband contributing to revenue beginning in 2025 (versus prior target of approximately 15% which excluded Global Broadband).
• Annual Adjusted EBITDA Margin⁽¹⁾ approaching 50% in 2026, up from the low 40%’s in 2022 and 2023 (no change to prior target).
• Free Cash Flow⁽¹⁾ of approximately $110 million in 2023, reflecting $10 million of operating expenses tied to Global Broadband, and an aggregate $5 million of additional interest expense and legal expenses tied to the SmartSky litigation that were not included in the previously announced Free Cash Flow target of $125 million. The Company reiterates its target for Free Cash Flow of over $200 million beginning in 2025.

Free Cash Flow and Adjusted EBITDA in 2022 and 2023 do not reflect the potential impact of Gogo 5G timing.

The Company’s 2022 financial guidance and long-term targets include Global Broadband but do not reflect the impact of other new strategic investments or the Federal Communications Commission’s Secure and Trusted Communications Networks Reimbursement Program, as the Company awaits further information regarding whether Congress will appropriate additional funds for eligible expenditures under the Program.

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JetBlue Expands Transatlantic Service with Highly Anticipated First Flight from Boston Landing at London Gatwick

JetBlue announced it has officially launched service from Boston’s Logan International Airport (BOS) to London’s Gatwick Airport (LGW). JetBlue’s daily nonstop service is part of the airline’s focus city strategy and its long-term transatlantic growth plans. London was the largest nonstop market not currently served by JetBlue from Boston and is among the most requested destinations from the airline’s large Boston customer base.

Last year, JetBlue launched its first-ever transatlantic service from New York-JFK to both Heathrow and Gatwick, London’s largest and busiest airports. The carrier plans to grow its transatlantic presence this year with new service from Boston Logan to London’s Heathrow Airport, launching September 20, 2022, and an additional Gatwick departure from New York starting October 29, 2022. Between JetBlue’s New York and Boston focus cities, the airline will offer five daily flights between the U.S. and the U.K. by October.

“Our London service from New York has been an incredible success and we are thrilled to finally bring this highly anticipated service to our Boston customers, a route that has long suffered from high fares by legacy carriers,” said Robin Hayes, chief executive officer, JetBlue. “As Boston’s largest carrier, adding this nonstop service to Gatwick will only make us more relevant in our New England focus city and introduce JetBlue to a largely unserved market.”

“We are excited to welcome JetBlue’s first transatlantic service from Boston to London Gatwick,” said Massport CEO, Lisa Wieland. “We thank JetBlue for their continued partnership, and we look forward to the additional travel opportunities this will generate for our passengers.”

“We are thrilled that JetBlue is launching nonstop service between London and Boston. Visitors from the United Kingdom represent our top overseas source market,” said Martha Sheridan, Greater Boston CVB President & CEO. “Rebuilding this segment will be critical to the overall recovery of our visitor economy. We share many historical and cultural bonds with the UK and are so excited that JetBlue is investing in this route, which will surely be a great success!”

“We are delighted to welcome the launch of JetBlue’s new service between Boston and London. Demand for travel to the UK has returned to pre-pandemic levels, and the additional connectivity from Boston, a vital US market, will make it even easier for Americans looking to book their next trip over. As we head into the beautiful Autumn season, whether visitors are returning or discovering the UK for the first time, now is the perfect time to explore another side of Britain, filled with buzzing cities, exciting outdoor adventures, and iconic landmarks with a modern twist,” said Paul Gauger, VisitBritain’s Senior Vice President for the Americas.

Get to Know Gatwick

Gatwick is the second busiest U.K. airport and JetBlue operates from the North Terminal, which has a range of passenger facilities, including a wide variety of shops and restaurants. Gatwick travelers benefit from a choice of convenient transport options including direct train links to Central London’s Victoria Station via the Gatwick Express and to stations across London via Thameslink and to Brighton and other South East coastal communities via Southern Railway.

JetBlue offers an enhanced airport experience at Gatwick with expedited security screening available to select JetBlue customers. The airline’s Even More® Speed option is now automatically included for Mint® customers, TrueBlue Mosaic® customers and Mosaic companions traveling on the same reservation, customers who have purchased a Blue Extra fare and for customers who have purchased an Even More Space seat. Applicable customers at Gatwick should follow signs for “Premium Security.”

“The addition of JetBlue’s Boston route is fantastic news for passengers and businesses across London and the south-east. Boston is not only a wonderful city to visit on holiday – playing a key role in American history – but is renowned as a thriving center for scientific research, innovation and technology. The wider state of Massachusetts is also a world leader in higher education, with Harvard University one of several top institutions,” said Jonathan Pollard, Chief Commercial Officer, Gatwick Airport. “With Gatwick’s direct train links to Cambridge – also known for its top university and as a hub for tech and bioscience industries – as well as more local businesses, this new connection will provide great opportunities for the whole region and beyond.”

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Canada Jetlines Change Launch Date

Canada Jetlines Operations Ltd. the new, all-Canadian, leisure airline, has announced a change to the date of inaugural flights out of Toronto Pearson International Airport (YYZ) to Winnipeg (YWG) and Moncton, New Brunswick (YQM).

The inaugural flights originally scheduled for August 15, 2022, have been tentatively rescheduled for August 29, 2022, subject to receipt of final licensing approval. Canada Jetlines is working closely with Transport Canada (“TC”) and Canadian Transportation Association, who are currently evaluating all completed documentation required for this application. The carrier looks forward to welcoming Canadian travellers before the end of the summer season.

“We’ve made the difficult decision to change our launch date as we continue to work with the regulatory authorities in Canada to secure our AOC,” shared Eddy Doyle, CEO of Canada Jetlines. “We greatly appreciate the effort and diligence that TC goes through to approve new airlines and remain optimistic throughout the process. We will continue to build strategic partnerships with destinations, travel agencies, and airports as we build out our five-year strategy.”

Canada Jetlines will be offering launch special fares available for a limited time for flights out of its travel hub at Toronto Pearson International Airport (YYZ) to domestic destinations Moncton, NB (YQM) and Winnipeg, MB (YWG). To book ticket reservations or vacation packages, visit Jetlines.com and plan with your preferred travel agent. Follow Canada Jetlines on all social media platforms and follow #CanadaJetlines for the latest news and updates.

Tickets are being sold pursuant to an exemption from the application of section 59 of the Canada Transportation Act. This exemption allows Canada Jetlines to sell tickets for air travel prior to issuance of its license. Canada Jetlines air service is subject to the Canadian Transportation Agency’s approval, and all prospective passengers will be informed, before a reservation is made or a ticket is issued, that the air service is subject to the Canadian Transportation Agency’s approval.

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