Although inflight connectivity is a highly sought-after commodity by airlines and their passengers, at least one of its biggest providers is struggling to turn demand into dollars.

In a recent conference call to discuss a new business strategy, Gogo Inc. admitted it is facing “major challenges” in its commercial aviation business and is considering investment opportunities that could potentially involve splitting up and selling off its business and commercial aviation divisions.

“Gogo has received a number of strategic inquiries from financial and strategic acquirers in the last few weeks, and our board has considered those inquiries and asked management to assess them,” Gogo Chief Executive Oakleigh Thorne told analysts in mid-July.

The company says that since its first-quarter 2018 earnings call earlier this year, “a number of parties” have contacted it to suggest various relationships and transactions, “some of which would involve splitting the company into BA and CA [business aviation and commercial aviation].”

Gogo has not disclosed further details about these approaches, but Thorne adds: “In sum, strategic discussions across both the [inflight connectivity (IFC)] and the broader avionics industry appear to be heating up. Competitors are thinking about consolidation, large strategic players are thinking about how to enter the business, and private equity firms are thinking about how to act as consolidators and take advantage of the huge IFC opportunity.

“In our case, those opportunities come up either in the context of being a platform for industry consolidation or as a centerpiece to connected aircraft strategies,” Thorne notes.

Gogo’s commercial aviation division has taken a battering following American Airlines’ decision to remove the provider’s air-to-ground (ATG) inflight connectivity system from hundreds of single-aisle aircraft and replace it with competitor ViaSat’s Ka-band satellite-based product.

Problems also arose with Gogo’s 2Ku satellite-based IFC service when it was discovered that deicing fluid had leaked under the radomes and affected the antennas on a number of aircraft, resulting in reliability issues at Delta Air Lines—one of Gogo’s biggest 2Ku customers.

Michael Lorenzini, senior vice president of aircraft technical operations at Gogo, tells Aviation Week that “corrective maintenance plans are underway,” and Delta is now “pretty much in the green as far as antennas are concerned.

“We found that some dry-system antennas were easily disrupted by any kind of fluid, so we changed our practices, put protections in place, and improved components in the radome and antenna,” he continues. “That work is ongoing.”

Thorne notes that since the corrective measures were put in place, customer satisfaction scores for 2Ku have increased and installations “continue to show rapid momentum as airlines regain confidence in the product.”

Nevertheless, the deicing issue is expected to cost Gogo in excess of $25 million. It adds to a series of headaches that prompted the company to draw up a new business model, known as Gogo 2020, aimed at addressing the challenges it faces and turning its fortunes around.

In addition to considering consolidation opportunities, Gogo announced it has reduced the headcount in its commercial aviation division by 5%, or 55 employees, it will stop offering subsidies to future airline customers, and it will start charging airlines for engineering services that up until now had been free.

“We are going to eliminate or materially reduce subsidies that we offer airlines in all future deals. The subsidy model has led to our entire industry suffering significant losses, and it was started by us when we first got into the commercial aviation market in the mid-2000s. But let’s remember, back then our three current-day largest airline partners were actually six airlines, and their balance sheets were messes, not ours,” says Thorne.

For airlines, the decision to eliminate subsidies and charge for maintenance will make inflight connectivity a more expensive investment. But Gogo is gambling that it is a price carriers will be willing to pay to ensure they can meet strong passenger demand for internet access.

“In conversations with several customers, quality airlines now care enough about connectivity for their passengers that they want the quality IFC players to survive, and are willing to consider new business models to make sure they have an adequate supply in the future,” says Thorne.

Airlines that have already ordered connectivity systems from Gogo could find themselves losing out on the subsidies they had previously agreed upon. In response to an analyst’s question about whether subsidies could be renegotiated in relation to backlog orders, Thorne says Gogo was “planning to have some conversations with our airline partners around that.”

Gogo is not the only IFC provider to have experienced financial difficulties. Global Eagle Entertainment installed a new management team in the wake of a delayed filing of its 2016 annual earnings report and embarked on a revamp of its own.

Thorne describes the challenges Gogo faces as “manageable” and appears confident that it, too, can weather the storm, noting: “We believe that this significant pivot in our model, the increased focus on quality and the substantial reduction of both [operational and capital expenditures], all of which have the tacit endorsement of several of our key airline customers, will allow us to achieve our goals,” he concludes.