GOL and AeroMexico have signed (07-Oct-2009) a codeshare agreement covering GOL services from São Paulo to six Brazilian destinations: Rio de Janeiro (RJ - Galeão and Rio de Janeiro Santos Dumont airports), Belo Horizonte, Porto Alegre, Curitiba, Brasília and Salvador. [more]
GOL and AeroMexico sign codeshare agreement
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Brazil: LATAM and Gol tout capacity discipline. Azul looks outward and Avianca Brazil grows share
As Latin America begins a slow climb from economic weakness that has plagued the region during the past two years, airlines operating within, to, and from the area’s largest market Brazil are hoping conditions in the country’s domestic market stabilise during 2017, after the country’s recession has shattered demand in Latin America’s largest market.
Brazil’s two largest airlines Gol and LATAM Airlines Brazil remain cautious about the country’s domestic environment, at the end of 2016 concluding that excess capacity remained on domestic routes, despite their own capacity reductions within Brazil’s domestic network. Additionally, neither airline seemed particularly bullish that pricing in the Brazilian market had started to stabilise.
The country’s third and fourth largest airlines, Azul and Avianca Brazil, each have fairly robust aircraft order books, which triggers questions about each company’s growth strategy for the short and medium term. Azul is expanding its international footprint in South America, including possibly examining the establishment of a larger footprint in Uruguay. Avianca Brazil’s major shareholder is turning its attention to other Latin American markets, and the airline’s strategy going forward remains somewhat unclear.
LATAM and Avianca continue balance sheet clean up as shareholder strife clouds Avianca-United tie up
A two year economic downturn in Latin America has forced the region’s airlines to put even more emphasis on improving their balance sheets through improved leverage, debt reduction and decreasing capital commitments. Two of the region’s largest airline groups – LATAM Airlines Group and Avianca Holdings – have worked to strengthen their balance sheets employing a variety of methods, including renegotiating aircraft delivery schedules to defray capital costs.
Avianca Holdings is taking delivery of six aircraft in 2017, whereas LATAM’s total fleet is shrinking 5.5% year-on-year during 2017 as it slashes its capex commitments by USD2 billion during a two year period.
LATAM is enjoying a boost in its liquidity after receiving an equity infusion by Qatar Airlines in late 2016, and the investment by Qatar helped boost LATAM’s liquidity to trailing 12M revenues by 5.5ppt year-on-year at the end of 2016. Avianca has been searching for an equity provider and strategic partner since mid 2016; but its selection of United has stirred controversy between its two largest shareholders, with lawsuits and counter lawsuits overshadowing the potential commercial benefits of the tie up.