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- IATA Code
- ICAO Code
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- VRG Linhas Aéreas S.A.
Av. Vinte de Janeiro s/no Ter de Passageiros no 01, Galeão
Rio de Janeiro
- Main hub
- Sao Paulo Congonhas Airport
- Business model
- Low Cost Carrier
- Domestic | International
- Association Membership
- Codeshare Partners
- Air France
Delta Air Lines
KLM Royal Dutch Airlines
Listed on the New York Stock Exchange, GOL Linhas Aéreas Inteligentes (Gol) is based in Sao Paulo, Brazil. The LCC has smaller hubs in Sao Paulo’s Congonhas International Airport, Rio de Janiero International Airport and Brasilia International Airport. Gol is a major player in South America, with over 40% of the Brazilian domestic market. Gol operates a fleet of Boeing 737NG aircraft supporting an extensive domestic network within Brazil and services to 61 destinations in ten countries across Central and South America.
Location of Gol main hub (Sao Paulo Congonhas Airport)
GOL share price
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Gol fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
722 total articles
Gol: concerns re transporting an expected 600,000 international visitors to FIFA World Cup overblown
104 total articles
Even as losses continued for Brazil’s second largest airline Gol during 3Q2013, there were some positive signs in the carrier’s results and its efforts to improve its financial leverage. Its work during the past year to beat back the effects of a weakening Brazilian economy and the resulting pressure that has had on demand were evidenced in improved passenger unit revenue and yields.
Gol also recorded positive margin improvement and made strides in its leverage ratios as its exposure to the Brazilian domestic market is more pronounced than its major rival TAM, who as part of the LATAM Airlines Group is leveraging the parent company’s ability to transfer some of TAM’s exposure to the falling BRL to the LATAM balance sheet.
Going forward it seems that Gol aims to focus on international expansion as a means to weather the tough market conditions within Brazil. While the carrier is not prepared to divulge the form that expansion will take, additional service to the US might be in the offing.
Nigeria’s aviation transformation programme is making good progress with the government’s extensive airport renovation project of 22 federal airports reaching the half-way stage and the remaining 11 airports to be remodelled by 2015.
Foreign carriers, attracted by Nigeria’s 170 million population and economic potential are also bringing in more capacity, in particular Ethiopian and Emirates, while Arik and Gol are preparing to reopen a direct link between Nigeria and Brazil for the first time in about 20 years.
But domestic carriers continue to struggle under the burden of massive debt, high operating costs and the prospect of increased competition from a proposed new national carrier and potential start-ups.
Latin America provides huge growth opportunities for low-cost carriers given the region’s expanding middle class and miniscule LCC penetration rate outside the two largest domestic markets. The existing small field of six LCCs are best positioned to benefit from the anticipated growth and leverage their first mover advantage. Four of the carriers are eyeing initial public offerings (IPOs), which could give them the cash to accelerate expansion in their home markets and regionally.
Latin America’s LCC sector is now concentrated in only three countries – Brazil, Mexico and Colombia. The other 18 countries that comprise Latin America (excluding the Caribbean) account for about 35% of seat capacity but, remarkably, do not have a single local LCC. These markets are only served by foreign LCCs, resulting in limited and in some cases no LCC services at all. The overall LCC penetration rate in these 18 countries is approximately 2%.
LATAM Airlines Group during 2Q2013 marked the first anniversary of its landmark merger between South America’s largest airline groups LAN and TAM with an overall loss of USD300 million for the historically weaker quarter, which also reflects the continuing struggles LATAM faces in the depreciation of the BRL against the USD.
But against those challenges LATAM has seen improvement in its domestic Brazilian operations as unit revenues in those markets grew 14% mainly driven by load factor growth.
Unlike Brazil’s second largest carrier Gol, LATAM’s scale is providing opportunities for the company to reduce its exposure to currency fluctuations, decrease its capital commitments and realign its fleet in certain operations to improve unit costs. All those initiatives allow LATAM’s management to remain confident that all the reasons behind their tie-up remain sound, and the underlying potential to deliver long-term financial benefits remains intact.
Despite strides made by Brazilian carrier Gol in cost containment and yield growth during 2Q2013, the now-familiar woes of a sluggish Brazilian economy and currency devaluation continued to weaken the airline’s overall financial performance as the company recorded a BRL433 million (USD187 million) loss for the quarter.
It is an improvement over the BRL715 million (USD309 million) Gol bled during 2Q2012, and even as Brazil’s currency has weakened since 1Q2013 Gol maintains that it will still post a positive operating margin in the low single digits for 2013. This would result from structural changes it has undertaken during the last year – namely dramatic cuts in its domestic capacity. But it is growing increasingly doubtful if Gol can reverse annual losses it has posted during the last two years during 2013 as its 1H2013 losses were BRL508 million (USD219 million), and no signs of an upturn in the Brazilian economy have surfaced for 2014.
Brazil’s domestic market has cooled down along with the country’s slumping economy, recording RPK growth of less than 0.1% in 1H2013. While growth should return in 2H2013 it will be very modest and far below previous levels.
Brazil was one of the world’s fastest growing domestic markets in 2010 and 2011, when domestic RPK growth of 23.5% and 15.9% was recorded. Growth slowed to 6.8% in 2012 as carriers started to cut capacity and trim back on expansion plans.
Load factors have improved significantly since mid-2012, providing a glimmer of hope that capacity levels are now sustainable following a period of irrational competition. With capacity returning to more rational levels and four airline groups accounting for over 99% of the market following a wave of consolidation, profitability should eventually improve in the world’s fourth largest domestic market.
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