By Alwyn Scott
NEW YORK (Reuters) - Gogo Inc said on Monday it had agreed to provide Japan Airlines Co Ltd with in-flight Internet service on the airline's domestic fleet of 77 aircraft, marking Gogo's first significant international contract, according to the company's chief executive.
Shares of Gogo were up 10.6 percent at $17.94 in afternoon trade in New York on Monday.
The in-flight Internet provider, based in Itasca, Illinois, said the JAL service would use Gogo's satellite technology and begin operating by mid-2014.
The deal is another step in a global race to provide better Internet connections on more planes, especially over oceans, using satellites and aircraft-mounted antennas that swivel as a plane flies to keep tracking the satellite beam.
Gogo's current system is largely ground-based and operates mainly in the United States, where it is the largest in-flight connectivity provider, with about 80 percent market share of WiFi-equipped aircraft.
JAL will be among the first airlines to employ Gogo's satellite system operating in the so-called Ku-band frequencies, Gogo Chief Executive Michael Small said in an interview.
Gogo offers Ku-band in conjunction with satellite services companies SES SA of Luxembourg and IntelSat SA of Luxembourg.
Delta Air Lines Inc also has contracted to use the Ku-band service on all 170 of its planes that fly international routes, Small said, noting that either Delta or JAL would be the first to offer the service to customers.
Without satellite systems, airline passengers had limited or no internet access over oceans. But that's about to change as more airlines sign up for satellites.
A competing satellite internet standard using a slightly different Ka-band frequency spectrum is scheduled to begin operations over the next few years. JetBlue Airways Corp and United Continental Holdings Inc are scheduled to roll out Ka-band internet service using a ViaSat Inc satellite by the end of 2013, pending regulatory certification.
ViaSat began operating its first Ka-band broadband satellite in January and plans to launch a second in 2016. The system offers many more times the bandwidth of Ku-band systems, said Don Buchman, ViaSat's director of mobile broadband.
JetBlue plans to offer broadband free to passengers checking email or doing light web browsing and charge for upgrades if passengers want to stream video, he said.
United is equipping long-haul international planes with Ku-band systems and U.S.-based flights with Ka-band. It also is offering passengers tiered service, with passengers paying a $2-$5 premium to get faster broadband. United says it also uses Gogo's air-to-ground service on some routes.
Small said the differences between Ka-band and Ku-band are minor and the Ku-band system is available now.
JAL's deal also makes that airline the first Japanese carrier to offer domestic in-flight internet, the airline said.
Small said Gogo aims to increase the number of aircraft using its system in the United States and is working on international deals.
(Reporting by Alwyn Scott; Editing by Andrea Ricci)