Gogo furloughs 60% of workers

With its airline customers virtually grounded, Chicago-based Gogo said Tuesday it will furlough 60% of its workers, or more than 600 people, and cut salaries for most of the rest.

The furloughed workers will be spread among all business segments. Gogo said CEO Oakleigh Thorne will take a 30% salary reduction and other executives will take a 20% cut. Certain hourly workers will not see a pay cut, the company said.

Spokesman Dave Mellin said the furloughs will begin May 4 but will start later for some, depending on business needs. “At this time, it’s difficult to say how long furloughs will last. In our planning and modeling, we have assumed we would evaluate the schedule on a month-to-month basis — or sooner if needed — since we anticipate the situation and its impact on our business to continue to evolve,” he said.

Mellin said of the company’s 680 employees in Chicago, 64% will be furloughed and 34% will take pay cuts.

The provider of inflight internet service said April traffic on its commercial airline partners is down 95% from the same month last year due to the coronavirus-related shutdowns. As a result, Gogo said its April sales to the airlines will be off by about 70%.

The company said its business with private aircraft also is down substantially.

Gogo said it has applied for an $81 million grant and a $150 million loan under the federal stimulus legislation. It said if it receives any help, it will modify personnel actions to comply with the terms of that assistance.