WASHINGTON — In-flight connectivity provider Gogo says it has zero interest in owning a satellite or satellites when it can lease capacity at will.

Dismissing queries that the Chicago-based company might otherwise seek to mimic the behavior of competitors Global Eagle Entertainment, which in January purchased an aging SES satellite, or Panasonic Avionics, which has been collaborating with satellite operators on custom payloads, Gogo Chief Executive Michael Small told investors May 4 not to misread Gogo’s recent bulk capacity order from SES as a step in either such direction.

“We have the ability to get capacity [and] lease capacity when we need it, where we need it and in the amount we need, which is by far the efficient way to acquire capacity versus buying a whole bunch up front by owning a satellite and then having to fill it, or having to architect where the capacity may go way in advance,” Small said.

Gogo on April 24 announced it was leasing all of the capacity on SES’s AMC-4, an all Ku-band satellite built by Lockheed Martin and launched in late 1999 on an Ariane 44P rocket. As a result, SES is moving the satellite to a new orbital location where it will have coverage of flight paths over the U.S. West Coast, the Pacific Ocean, and specifically routes to and from Alaska and Hawaii. AMC-4 previously covered Central America, with some coverage extending into North and South America.

The lease does bear some similarity to Global Eagle’s January purchase of all the capacity on SES’s AMC-3, an inclined orbit satellite launched in 1997, which Global Eagle rebranded Eagle-1. SES will continue to operate the satellite over North America and the Caribbean for Global Eagle.

But the similarities end there. Whereas Global Eagle hinted that they might do deals similar to Eagle-1, Small said Gogo has “more than enough capacity now and for the foreseeable future,” and that the company’s “open architecture multi-source leasing strategy,” is what yields the lowest bandwidth cost structure.

“It is far more cost-effective to lease satellite capacity rather than making large and long-lead time investments in owning a few satellites,” Small said. “Our leasing strategy is becoming more compelling each year as the rate of innovation in the satellite industry continues to accelerate.”

SES told SpaceNews April 26 that AMC-4 will be station kept, despite being three years past its design life. Satellite operators sometimes limit station-keeping propulsive maneuvers for older spacecraft, prolonging their lifespans but limiting the satellite to serving customers that can track the spacecraft’s gradual movements in the sky. This is not a problem for aviation and other mobility customers.

Small said Gogo has leased capacity from nine different satellite providers and has access to dozens of satellites around the world. He attributed Gogo’s ability to curb capacity costs to the company’s 2Ku antenna from ThinKom, the ability to capture performance enhancements and cost reductions through improved satellite technology (including preparing for low-Earth orbit systems), and the company’s flexible leasing approach. Small said Gogo’s contracts with satellite operators, SES and Intelsat especially, include the ability to shift capacity around the globe as needed.

With 2Ku, Small said Gogo customers are getting 98-percent service availability, 98-percent coverage of global flight hours, and at least 15 Mbps per passenger. A new modem for 2Ku is bringing speeds in the range of 70 Mbps on wide beam capacity and more than 100 Mbps on the spot beams of high-throughput satellites, Small said. That modem goes to market during the second half of this year, he said.

Gogo reported nearly 3,000 commercial aircraft online as of March 31, more than 4,300 business aircraft using the company’s terrestrial air-to-ground (ATG) network, and more than 1,600 aircraft contracted for 2Ku. As of April 30, more than 170 aircraft have 2Ku installed.

Gogo’s revenue for the quarter increased 17 percent year over year to $165.4 million. In a May 4 statement, Small said Gogo remains on track to become cash-flow positive in 2019.

John Wade, Gogo’s chief operating officer, said Gogo has 2Ku Supplemental Type Certificates for two thirds of the world’s commercial aviation aircraft. The company anticipates 450 to 550 2Ku installations by the end of this year, he added.

Gogo is also continuing to invest in its next-generation ATG system, spending $9.4 million on its U.S. ATG network this past quarter. Wade dismissed concerns that rising competitor SmartSky will challenge Gogo for superiority in business aviation. SmartSky has raised around a quarter of a billion dollars in total for a competing ATG system in the United States that the company expects to activate later this year.

Wade said lab testing with Gogo’s next-gen ATG reached 134 Mbps, and that the network is on track for deployment in 2018.

Caleb Henry is a former SpaceNews staff writer covering satellites, telecom and launch. He previously worked for Via Satellite and NewSpace Global.He earned a bachelor’s degree in political science along with a minor in astronomy from...