FORT WORTH (CN) - American Airlines sued Internet service provider Gogo, which dominates in-flight Internet connections for passengers, demanding it recognize American's right to terminate their contract so the airline can look for a faster service.
Fort Worth-based American sued Gogo in Tarrant County Court on Friday.
The airline says Gogo fka Aircell is "the largest supplier of in-flight WiFi services, controlling about 80 percent of the market and providing internet connectivity to passengers on more than 9,000 aircraft."
American says Gogo is refusing to abide by their 2012 contract that allows it to "notify Gogo of competitors that offer connectivity services that materially improve on Gogo's air-to-ground system," which relies on ground-based cellular towers.
"Under the contract, once notified, Gogo may match or exceed the competitor's offering by submitting a new proposal to American," the complaint states. "If it chooses not to do so, or if American reasonably determines that Gogo's proposal is less favorable than the competitor's, American may terminate the agreement."
American says Gogo's new competitors, including satellite-based ViaSat, offer better "pricing and business models" for airline customers.
The airline says speedy in-flight WiFi "has profoundly impacted" the airline industry, with its availability affecting the flight selection decisions of 66 percent of passengers.
It cites a survey that concluded that one in five customers switched airlines because of better WiFi offerings.
"Whereas Gogo's system provides 3 Mbps (or at most, 10 Mbps) of bandwidth shared among all users on a flight, and blocks most video content, these new satellite-based services offer 12 Mbps per device - more than enough for passengers to stream music, movies, and television," the complaint states.
"Also, with antennas facing up to satellites, instead of down to cell towers, these competitors can offer gate-to-gate WiFi access for customers, even over oceans."
American said Monday it is evaluating "all of our options."
"American continually evaluates in-flight connectivity service to determine what best meets our customers' needs and wants," the airline said in a statement.
Gogo said Monday that American is a "valued customers of ours" and that it "look(s) forward to resolving the disagreement."
Gogo said it will submit a competing proposal based on its satellite-based service 2Ku.
"We believe that 2Ku is the best performing technology in the market and look forward to discussing our offer with American," the company said in a statement.
American seeks declaratory judgment.
It is represented by R. Paul Yetter with Yetter Coleman in Houston.
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