Gogo (GOGO) plummets as American threatens to dump its Wi-Fi

• ticker:  GOGO

Gogo shares plunged today after the company disclosed that one of its biggest customers, American Airlines, said its in-flight Wi-Fi service is lacking.

The Chicago-based tech company's shares were down about 28 percent five minutes before the market was to close today.

In a regulatory filing, Gogo said: "American notified Gogo that it considers a competitor's connectivity service to offer a material improvement over our early-generation air-to-ground service with respect to a portion of American's fleet representing approximately 200 aircraft."

Gogo provides in-flight Wi-Fi for American, Delta and other airlines. The company employs more than 1,000 people at its downtown headquarters, which opened last year.

Gogo is headquartered in Chicago's West Loop at 111 N. Canal St.

Technology for providing Internet connectivity to aircraft has been evolving rapidly, from ground-based cellular to satellite-based service, which is much faster and cheaper than earlier generations of satellite technology. Gogo is early in the process of rolling out the new satellite technology.

Under its contract, American can potentially terminate its contract with Gogo if a competitor's equipment provides substantially better performance. However, Gogo also has the right to bid to upgrade its equipment to match the competitor's.

"We plan to submit a competing proposal to install our latest satellite technology—2Ku—on this fleet," Gogo said in the regulatory filing.

American filed suit Friday, notifying Gogo of a competitor's service.