Gol nears the end of a crucial debt overhaul, but challenges in Brazil still loom large

During the past year the Brazilian airline Gol has been engaged in a comprehensive restructuring plan, creating a more stable capital structure to withstand Brazil's tough economic downturn. The company is in the final stages of that restructuring, which has entailed reworking its aircraft order book and shrinking its fleet; advancing ticket sales with its frequent flyer supplier; and making an attempt to restructure international bonds that received a tepid reception from the market.

The comprehensive restructuring is designed to create stability for Gol as it faces the economic realities ushered in by Brazil's recession, and to sustain its leading competitive position against its rivals in the intense Brazilian market. Although Brazil's largest airlines Gol and TAM continue to shrink their domestic capacity, other airlines are continuing to grow capacity in Brazil's troubled domestic market.

Gol has also undertaken network changes to improve connectivity throughout Brazil from the airports it serves in São Paulo and Rio de Janeiro. This action is to improve its positioning among corporate clients, a positioning that remains important over the long term despite continued weakness in that passenger sector.