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Delta Air Lines Picks Viasat For Internet

Viasat Inc. (Nasdaq: VSAT) recently got some good news for its commercial in-flight internet connectivity business, which has been hit by the travel industry’s slide in the era of COVID-19.

The Carlsbad tech company announced in early January that it has a deal to provide in-flight internet to 319 Delta Air Lines jets. The equipment will be retrofitted on some aircraft. It will also go on new jets. Financial terms of the deal were not disclosed.

“We’ve been working towards that for a long time,” said Viasat CEO Rick Baldridge, adding that competing tech providers were also pushing for contracts. The win, he said, “is strong acknowledgment that we’re the ones that can deliver the quality that they desire to give to their customers.”

Delta also offers in-flight internet from a rival company, Gogo Inc. (Nasdaq: GOGO). The Chicago company will continue to offer service on part of Delta’s fleet. “I think that our job is to provide a service that nobody could match, and to win the rest of their fleet,” Baldridge said.

Success in Europe

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The win follows news from November that Viasat will put its service on a majority of KLM Royal Dutch Airlines’ European fleet.

Viasat had its in-flight connectivity service on 1,379 aircraft at the end of December 2019 and 1,390 aircraft as of March. By the end of June, the number of aircraft using Viasat had dwindled to 760, with 630 aircraft idle. That number grew to about 1,070 by the end of September.

“This was definitely scheduled to be a phenomenal year for us in in-flight connectivity — until COVID,” Baldridge said. “We had a big ramp-up with American [Airlines] in the year before. A new all-time high for service would have been this year, had COVID not happened. So the real issue for us right now is getting those airplanes back in the air and flying, and people traveling.”

Viasat notes that its business is diversified. Despite the fall-off of in-flight connectivity service, revenue in Viasat’s broader Satellite Services business unit grew 5% year-over-year to $216 million in the quarter ended Sept. 30. Results from the December quarter have not yet been announced. 

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