Gol’s decision to drop Webjet brand and fleet comes as no surprise

The 23-Nov-2012 decision by Brazilian low-cost carrier Gol to shut down its Webjet subsidiary falls in line with the larger scheme outlined by the company when it initially disclosed plans to acquire its smaller domestic rival in Jul-2011. Shedding Webjet's smaller and older Boeing 737-300 narrowbodies has always been a long-term plan for Gol as it integrated Webjet into its operations.

The new timeline to eliminate 737-300s from the combined fleet by the end of 1H2013 allows Gol to closely match the capacity cuts planned by its major rival and Brazil's largest carrier TAM, which earlier unveiled plans to shrink capacity by 7% during the first six months of 2013. The accelerated capacity reductions at Gol, as a result of its decision to close Webjet, continues consistent downward revisions by both Gol and TAM throughout 2012 in an effort to rationalise supply in Brazil's depressed market, which began showing yield deterioration around the time Gol moved to purchase Webjet.