Gogo’s contract with American Airlines brought in 14% of its $409 million of revenue in 2014, according to a filing with the Securities and Exchange Commission.
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Gogo announced on Monday that American Airlines would not sue the company.
Gogo Inc. stock rose after American Airlines Group Inc. dropped a lawsuit against the in-flight internet provider over contract terms.
The Fort Worth-based carrier had sued Gogo earlier this month, saying that its contract with Gogo allowed it to renegotiate or terminate its agreement if another company offered a better service.
So far today, 4.98 million shares of Gogo have traded, well above the company’s 30-day average of 1.68 million shares.
“Gogo believes that this stipulation provides American with the complete relief it requests … and thus moots the dispute that is the subject of the court action”, the company said in the SEC filing. However, the case was dismissed without prejudice, according to the Star-Telegram, which means that American can still refile the lawsuit at some point in the future if it finds the need to do so. American had said it wanted to upgrade the Internet capacity in 200 older model, single-aisle jets, using technology from Gogo rival ViaSat Inc. “We originally notified Gogo of a competitor’s offering, and we will evaluate all of our options”, the American spokesperson told The Verge.
But the suit has ended, at least for the time, with Gogo pledging to soon offer another, competing service package for the aircraft covered by American’s contract.
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The news caused Gogo’s shares to plummet as much as 40%.
