Good morning, and welcome to the Gogo Inc. annual meeting of stockholders. I would like to introduce Mr. Ron LeMay, Chairman of Board of Directors. Mr. LeMay, you may begin.
Thank you very much, and good morning to everyone. The meeting will please come to order. I want to welcome you to the annual meeting of the stockholders of Gogo Inc. This is Ron LeMay, I'm Chairman of the Board of Directors. As you're aware, due to public health and safety concerns related to COVID-19, we are conducting our first ever virtual annual meeting of stockholders, and each of us is attending this meeting virtually from different locations. There will be a management presentation at the conclusion of the meeting, after which Oakleigh Thorne, President and CEO, will be available for questions. Also present virtually at this meeting today are other members of Gogo's Board of Directors, Robert Crandall, Hugh Jones, Michele Coleman Mayes, Bob Mundheim, Christopher Payne, Oakleigh Thorne, Charles Townsend, and Harris Williams.
We also have with us members of company's management, including Barry Rowan, Executive Vice President and Chief Financial Officer, and Margee Elias, Executive Vice President, General Counsel, and Corporate Secretary. Ms. Elias will act as Secretary of the meeting. Todd Schaefer, a representative of Broadridge Financial Solutions, has been appointed to act as Inspector of Elections. Natalie Martini and Kristen McHugh, representatives from our independent accounting firm, Deloitte & Touche, are also virtually present at the meeting. During the question and answer period at the end of the meeting, they will be available to answer appropriate questions. The agenda for the meeting and the rules of conduct for the meeting are accessible on the web portal. The conduct of an orderly meeting, we ask you abide by these rules.
As stated in the rules of conduct, questions can be submitted in the field provided in the web portal for this meeting. We ask that you restrict your remarks to the item of the agenda that is before us at the time. Thank you for your cooperation in complying with these rules. The Secretary has delivered an affidavit of mailing establishing that notice of this meeting was duly given. A copy of the notice of meeting and affidavit of mailing will be incorporated into the minutes of this meeting. All stockholders of record at the close of business on March 3, 2020 are entitled to vote at the annual meeting. A list of the stockholders of record entitled to vote at this annual meeting will be available on the web portal for the meeting for the duration of this meeting.
Our first order of business at this meeting is to determine whether the shares represented at the meeting, either in person or by proxy, are sufficient to constitute a quorum for the purpose of transacting business. Ms. Elias, do you have a report?
Yes, Mr. Chairman. The stockholders' list shows that holders of 88,441,299 shares of common stock of the company are entitled to vote at this meeting. There are 78,617,424 shares of common stock that are represented in person or by proxy, or approximately 89% of all shares entitled to vote at this meeting.
Thank you. Because holders of a majority of the shares entitled to vote at this meeting are present in person or by proxy, I declare this meeting to be duly convened for purposes of transacting such business as may properly come before it. The first proposal before the stockholders of the company is the election of two directors to serve until the annual meeting of stockholders in 2023, and until their successors are duly elected and qualified. The Board of Directors of the company recommends the election of the following persons as directors of the company: Hugh W. Jones and Oakleigh Thorne. Does anyone have any questions regarding the election of the two directors? I'll wait for a moment to see if questions come. Seeing no questions, I'm going to proceed with the second proposal.
The second proposal before the stockholders of the company is the approval of the compensation of the company's named executive officers. This proposal is a non-binding shareholder advisory. The Board and the Compensation Committee will take into account the result of the vote when determining future executive compensation arrangements. The company's executive compensation is discussed in the proxy statement that was made available to you earlier. The Board of Directors of the company recommends that the compensation of our named executive officers be approved. Are there any questions regarding executive compensation? I'll wait for a moment.
There appear to be no questions regarding this proposal. I'll move on. The third proposal before the stockholders of the company is the approval of an amendment to the Gogo Inc. Employee Stock Purchase Plan to increase the maximum number of shares of our common stock that may be issued under the ESPP to 2,200,000 shares, an increase of 1 million shares. A summary of the material terms of ESPP and the rationale for the amendment are set forth in the proxy statement that was made available to you earlier. The Board of Directors recommends the approval of the amendment to the Gogo Inc. Employee Stock Purchase Plan. Are there any questions regarding the proposed amendment to the ESPP? I'll pause. Seeing no questions, I'm going to move to the fifth proposal, or the fourth proposal rather.
The fourth proposal before the stockholders of the company is the approval of a Stock Option Exchange Program that would provide the company's employees, including executive officers, with the opportunity to exchange certain stock options owned by them for a lesser number of new stock options based on exchange ratios determined by the compensation committee of the Board of Directors. The material terms of the Option Exchange Program and the rationale for the program are set forth in the proxy statement that was made available to you earlier. The Board of Directors recommends the approval of the Option Exchange Program. Are there any questions regarding the proposed Option Exchange Program? Seeing no questions, I'll move on to the fifth proposal. The fifth proposal before the stockholders of the company is the ratification of the appointment of the independent registered public accounting firm for the fiscal year ending December 31, 2020.
The Board of Directors of the company recommends the ratification of the appointment of Deloitte & Touche LLP. Are there any questions regarding the appointment of Deloitte & Touche? Seeing none, the polls are open now. If you previously voted by proxy, you do not need to vote today unless you wish to change your vote. If you have not voted or would like to change your vote, you can do so by clicking on the Vote Here button in the lower right-hand side of the web portal. I'll pause while those who may be interested in voting have the chance to do that. All voting appears to be complete at this point. That being the case, I hereby declare the polls closed. The Inspector of Elections will tabulate the final results. Will the Secretary please report the preliminary results of voting?
Based on the preliminary results received from the Inspector of Elections, the stockholders have voted, one, to duly elect Hugh W. Jones and Oakleigh Thorne to the Board of Directors. Two, to approve on an advisory basis the compensation of the company's named executive officers. Three, to approve an amendment to the Gogo Inc. Employee Stock Purchase Plan. Four, to approve the Option Exchange Program. five, ratify the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for fiscal year 2020. The final voting results will be reported in a Form 8-K that will be filed with the Securities and Exchange Commission no later than May 5th.
I want to thank you for attending today's meeting. The meeting is now adjourned. We will now have a presentation by the company's management, after which we will have a brief question-and-answer period. Oakleigh.
Before Oakleigh gets started on the presentation, I would like to take this opportunity to remind you that during the course of these presentations, we may make forward-looking statements regarding future events and the future financial performance of the company. We caution you to consider the risk factors that could cause actual results to differ materially from those in the forward-looking statements in this presentation. These risk factors are described in the version of this presentation that was filed with the SEC this morning and are more fully detailed under the caption Risk Factors in our annual report on Form 10-K and other documents we have filed with the SEC. Any forward-looking statements that we make today are based on assumptions as of this date, and we undertake no obligation to update these statements as a result of new information or future events.
During this presentation, we'll present both GAAP and non-GAAP financial measures. We included a reconciliation and explanation of adjustments and other considerations of our non-GAAP measures to the most comparable GAAP measures in the version of this presentation filed with the SEC this morning. Now I'll turn it over to Oakleigh.
Thank you, Margee. Thank you, Ron. Normally, an annual meeting presentation, I'd start by going over the year that just passed and talk about our accomplishments, and then talk about our current situation, and then discuss our goals for 2020. Given today's environment, I think we'll just start with COVID-19, and then we'll talk about 2019 and 2020. Let me start just by talking about the status of the industry we play in, especially the commercial aviation side of that industry. Actually, since I put this slide together, I think there's an even more meaningful statement that came out of industry leadership about the status of the industry, and that was from the CEO of Airbus, who said yesterday that the very survival of Airbus is at risk as a result of this pandemic.
I guess all I have to say is if the survival of Airbus is at risk, the survival of a lot of players is at risk. I'll make a couple points on this slide, and I'm not going to get into each point because that would take too long, but passenger traffic is down significantly, 95%. That's what the airlines are saying, and that's what we're seeing on flights with Gogo connectivity as well. IATA is projecting that the airline industry will actually be down $314 billion in revenue or 55% for 2020 versus 2019. Down at the bottom of the left-hand side there, we know there are 6,000 aircraft right now that are actually parked in the desert, and there are a lot of older aircraft that are being retired.
Today, there are a little over 1,000 2Ku planes that are also parked in the desert among that 6,000. Over on the right, you can see Delta initially said they were losing $80 million a day. Recently on their earnings call, they upped that to $100 million a day. They hope to reduce that to $50 million a day by the end of the second quarter, but that's a big number. You can see airlines are trying to raise capital anywhere they can, in debt and even in equity markets. United and now Southwest both went to equity markets to raise capital. We've seen Virgin Australia enter administration, equivalent to bankruptcy in Australia. A lot of changes in the airline industry itself. There are some green shoots. In China, flights were up 20% February to March, and they're reporting 60% load factors.
That would be viewed as a very strong market in the U.S. right now. Finally, I'd say our largest customer is Delta, and in their recent earnings call, they did reconfirm their focus on delivering a premium passenger experience as their competitive advantage, and we think that's good because that's what Gogo delivers for Delta. Let's talk about Gogo for a second. We obviously have been affected significantly by this. We expect our commercial aviation sales to be down 60%-70% in April. We'll give more guidance on the rest of the quarter when we have our Q1 earnings call in a week or two. On the business aviation side, that's a stronger business, but we are seeing a few issues. We've had an uptick in account suspensions in April.
An account suspension is where, in our contract, customers are allowed to suspend service for a month if they take the aircraft into maintenance, for instance, or for some other reason won't be flying that aircraft for a month. We've seen that uptick in April. We've also seen activations way down in April. You can imagine in this environment, nobody is buying, installing, and turning on a new system right at this particular moment. We see activations down. Prior to our cost reductions, which we have just begun, Gogo Commercial Aviation is losing about $1 million a day. Though government aid may be on the way, and I'll talk about that more in a moment, that is still uncertain, and Gogo needs to conduct itself as if that aid were not on the way. What are we doing about this?
We've talked about some of this publicly. Our first concern was with our employees. They are our major asset at Gogo. We have gone work from home, which is actually required everywhere we have a facility right now, and we're complying with local orders, and we've begun planning on how we're going to reintegrate to our facilities, which is going to be somewhat tricky when those work from home orders are lifted. We've got 1,000 employees working remotely using multiple tools like Skype and Microsoft Teams, Slack, et cetera. I think we all feel that we're actually communicating and coordinating well. My observation is that we actually start more meetings on time and end on time in the virtual world than we do when we're all in the office. We do have skeleton crews in place for certain activities.
In our Bensenville warehouse, for instance, we still are shipping some equipment, also out in Broomfield, Colorado, for our business aviation division. We have people in our IT organizations and some of our engineering organizations that need to come in and work on specific pieces of equipment that you really can't take home. There is some activity by skeleton crews, and we thank them for coming in. I'd like to just note that our view is that employees are our most important resource, and we have tried to take an approach throughout this crisis of laying out what Gogo's issues are and what our decision-making processes are and communicating those and the results of those decisions as soon as we can to our employee base. Now turning to what Gogo's doing about this on the financial side. We started by setting three clear objectives.
The first is to ensure adequate liquidity over the medium term, and we set goals in terms of what we think our minimum cash balance can be. Second is to continue paying our interest payments and honoring our debt obligations. The third is to do all that while maintaining the franchise value of our businesses. That means maintaining customer goodwill, keeping our products good, strong, focusing on quality, et cetera. The good news is, as we pointed out in our Q4 earnings call and in our recent press release on our cost reduction actions, we have started with more than $200 million in the bank, and we have some cushion going into this. That said, it's a world of uncertainty, and Gogo needs to plan for that, and we have developed what I call a set of flexible action plans.
It started by developing what we call best case and worst case scenarios, and then we constantly refine those scenarios and sort of aim between those goalposts in terms of what we need to do from a cost reduction perspective. We have 16 levers, we call it, to manage costs, and depending on where we see things going from a revenue perspective, we can modulate on each of those 16 levers in terms of how we're going to make sure we hit the three goals I discussed a moment ago. Non-personnel levers, there are about nine of those, and they include things like supplier negotiations. We've been in discussion with our satellite providers as well as our hardware providers. We have airline negotiations going on in terms of installations and other arrangements with them.
There's a whole bunch of things in our control that are not personnel related, like our marketing spend, travel spend and other non-essential spend that we can scrub and reduce. On the personnel side, we have talked about furloughs publicly. Those were announced last week. We talked about salary reductions, which actually began with our Board of Directors, which was also announced last week. Earlier, we had announced hiring freezes, merit increase delays, and deferred bonuses. We are managing this day to day and doing so really focused on making sure that we achieve the three goals I laid out a moment ago. There is a new 17th lever, which is the United States government. We are not counting on any aid from the government, but obviously, if it could be arranged in the right terms, it could be a big help.
There are really two areas that Gogo might be able to receive aid under the CARES Act. One is the $32 billion in short-term payroll protection grants for the air carriers. There's a provision in there for contractors, and we applied for early action on that on April 3rd. The other is the $29 million loan program, and that explicitly included Part 145 repair stations, which Gogo is part of. We applied for that for loans on April 17th. Now, should we get government assistance, we'd be able to roll back the furloughs and pay reductions we announced earlier. In fact, those don't take effect until May 4th. If we get some government assistance, we will be able to roll those back and make sure that we qualify for the government assistance.
This is, like I said, a real-time team effort to manage our cost to try and make sure we achieve the goals I set out, and we will give a more detailed update on that on our Q1 2020 earnings call. All right. Let me now look back at 2019 a little bit because it was really a terrific year for Gogo. A very, very successful year. I'm just going to talk about a couple of the things we got done that were really significant. There are a lot of other things that were also very meaningful, but we don't have all the time today to go over all of them. Let me start with our debt. We went into the year needing to get our $162 million remaining convertible stub-refinanced, and we managed to do that.
Not only that, we were able to pull in our $690 million senior secured notes. This was terrific. It pushed 80% of our maturities out to 2024. We lowered the interest rate on the senior portion of that significantly, and by being able to roll that convert into a senior, we reduced the dilutive effects on shareholders. We thought that was a tremendous accomplishment. We continued to see positive results from the Integrated Business Plan initiatives we launched in 2018 on both quality and on cost. I'll just give one example on quality. We had zero de-icing incidents last winter and this winter.
De-icing was a huge threat to this company in 2018. The processes we put in place to solve that and address other quality issues have permeated the organization. We've got just a tremendous amount of focus on quality now. Our metrics on quality across the board are going up dramatically. That's very important. On the financial side and the cost side, I think our adjusted EBITDA is a good measure of how successful we've been in terms of taking cost out of the organization due to the IBP initiatives. We improved adjusted EBITDA 104% to $146 million for 2019, up from $71 million in 2018. Cash flow is very important to us. We've made a lot of progress in moving to free cash flow. This is obviously operational improvements, but also better management of our balance sheet.
We improved free cash flow by $163 million, up from -$214 million in 2018 to only -$51 million in 2019. Then we made a lot of progress on products in the year. I can't go into all of them, but I'd just like to emphasize the Gogo 5G project launch. This is a really significant enhancement to our ATG network. It's on target to launch in 2021. It's on budget. It's going to be a significant advance in product offer in terms of speed. It's of course, on our proprietary ATG network. We're very excited about that and numerous other product advancements. Beyond COVID-19, we believe there's a really solid future for the company.
As we make our plans to address the solvency, et cetera, in the COVID-19 crisis, we're also keeping an eye on preserving investments we think are really important for our future growth and strength. I'll just enumerate some of the things we're still focused on or working on. The execution of the Delta Free project is still very important to us. That project has not been delayed or pushed or canceled by Delta. We've achieved a great deal in terms of innovative solutions to try and really drive a superior product experience there for Delta that will not only work for us at Delta but at other airlines later. We continue to focus on that, and that'll be a big effort for this year. I just talked about 5G.
We need to continue to focus on that and make sure that we deliver on time and on budget. A big advantage for Gogo competitively in our ecosystem is our flexibility and our asset-light model. Two of our largest competitors are satellite companies themselves, and they're kind of wed to the satellite assets that they have, and they are very focused on geo satellites and on long-term investment plans, tying them to these very high satellites that have very high latency. We are able to take advantage of advances from all the other satellite companies in the world. In two areas in particular that are exciting to us, one is non-geostationary orbit satellites, NGSOs, otherwise known as MEOs or LEOs.
We think that we will partner effectively with satellite companies that are producing those to deliver much lower latency products for our customers than our big competitors can produce. Latency is very important in in-flight connectivity because the lower the latency, the higher the speed and the faster and the more responsive the system seems. That is a tremendous driver of customer satisfaction. Another exciting area is electronically steerable antennas, and we'll continue to focus on that. These are more flat panel antennas. They're capable of tying into two different satellites at the same time, which give you the ability to really optimize performance from both a speed perspective, but also a cost perspective in terms of how you utilize the satellite capacity.
Very exciting and something else that we will continue to focus on and we think will give us a competitive edge over our major competitors. We will also continue to drive to positive free cash flow. We obviously are going to go through a revenue downturn here, but we think that that will turn around. Exactly when is somewhat hard to predict, but we don't think travel is going anywhere. It may change a lot, and we need to plan for that change, but revenue will come back. In the meantime, we are going to be looking at reducing our airline subsidies, and that's part of our conversations for COVID relief with our airline partners right now. Of course, that would help us move to cash flow positive more quickly. Finally, on this page, we have a strategic imperative here, we believe.
There's been a lot of talk over the years about consolidation in the in-flight entertainment and connectivity business and in the satellite industries. We think that the COVID-19 crisis is actually spurring more activity in that regard. I think we have to remember at Gogo that we've got two really valuable businesses. The Business Aviation business has got a really attractive industry structure, got low customer concentration, and it's much less price sensitive than the Commercial Aviation business. Our Business Aviation division's got a great market share. It's got leading product at really attractive prices relative to competition in the ATG world. It has a very strong recurring revenue model, strong cash flow, and that gives us the ability to invest to strengthen our strategic and market position, which is what we're doing with the 5G initiative.
A really strong business that we think has tremendous value. On the commercial aviation side, the industry is characterized by a lot of competitors competing very intensely, but no competitor with really enough scale to make this a profitable and sustainable business. We come into it with leading share, with attractive customers in this scale sense of the business. We have tremendous capabilities in terms of engineering, software development, sales support, network management capabilities, aircraft engineering, et cetera, that as we deal with our competitors now on a lot of different projects, we realize how good we really are at a lot of these things. A lot of other people are still learning how to do the things that we already have mastered.
We have a leading product in Gogo 2Ku, and we believe that either vertical or horizontal integration with some other entities could create a really financially stable industry leader in the commercial aviation IFC business. Our goal as a management team is to turn that value that we see in both those businesses into a reality for our shareholders, and that will continue to be our focus going into 2020. With that, Ron and Margee, I'd like to open up the floor for questions.
Oak, we have two questions from stockholders. The first is there a chance Gogo will file Chapter 11?
It's certainly not part of the plan. We think with our 16 levers and our current view of what's going to happen in the market, that we will not be filing Chapter 11. You can never say there isn't a 0.0001% chance of something like that. We don't see it.
Thank you. We have one other question. You highlighted that airlines are raising capital in the debt and equity markets. Is Gogo considering raising additional capital?
Well, we have no plans at this point to raise additional capital. However, we always look at things opportunistically, and if we see an opportunity to raise capital in an efficient manner for our equity holders and in a manner that our creditors will allow us to do, I think we would do so. We don't see an urgent need to do so at the moment, and we don't have a current plan to do so. Like I say, we keep our eye on the environment and be up for opportunities.
Thank you. Another question came in just in the last minute. You've talked about industry consolidation in the past. How has that changed in the current environment?
It's a good question. I think it's picked up steam in the current environment because everybody's revenues are hurting, and that just accentuates the issue around nobody really having scale. Everybody's looking to combine and create companies that do have enough scale to make money in this business. I think the easy answer is it certainly accelerated the conversations.
Okay. Questions keep coming in here. Will any government assistance preclude you from repurchasing any of your bonds?
Great question. Usually, that's been around equity, that you can't have stock buybacks. In reviewing the CARES Act, we didn't see anything that would stop us from buying or refinancing our bonds.
Thank you. Would the company consider selling BA or CA in its entirety?
Yeah, I think those are strategic options. We think, as I pointed out in the presentation, that CA is a tremendous asset. However, it might be best combined with somebody else to really create scale in that space. That would raise the possibility that CA would be merged with somebody or that we would ourselves go out and acquire somebody and combine it into our CA business.
Okay. We have no more questions.
Okay. Thank you very much.