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Delta's Gol investment to open up Brazil even more
12/12/2011
Access to Brazil from the US and Europe is set to become even easier and more affordable, following a $100 million investment by Delta Air Lines in the low cost Brazilian carrier, Gol Airlines.
The investment is the result of long-term efforts by Delta to stake a claim in the Brazilian low-cost market, which has become more pressing in light of Brazil’s growing strength on the world economic stage.
Delta will gain preferred stock in Gol amounting to around 3 per cent of the company’s capital, as well as a seat on the board. The broader commercial alliance will see the two companies align their sales and loyalty programmes.
Gol’s chief executive, Constantino de Oliveira Júnior, said that the deal would allow the company to solidify its current market position and look to expansion as an option. He explained, “The deal helps us to strengthen our balance sheet and leverage position, which is one of our big objectives, and so allows us to stick to Gol’s concept of being a low-cost airline.”
Analysts of the Brazilian air transport market have said that the break-neck growth it has seen in recent years is likely to continue over the long term, spurred on by the country’s strong economic growth and the looming 2014 World Cup and 2016 Olympic Games.
The investment is the result of long-term efforts by Delta to stake a claim in the Brazilian low-cost market, which has become more pressing in light of Brazil’s growing strength on the world economic stage.
Delta will gain preferred stock in Gol amounting to around 3 per cent of the company’s capital, as well as a seat on the board. The broader commercial alliance will see the two companies align their sales and loyalty programmes.
Gol’s chief executive, Constantino de Oliveira Júnior, said that the deal would allow the company to solidify its current market position and look to expansion as an option. He explained, “The deal helps us to strengthen our balance sheet and leverage position, which is one of our big objectives, and so allows us to stick to Gol’s concept of being a low-cost airline.”
Analysts of the Brazilian air transport market have said that the break-neck growth it has seen in recent years is likely to continue over the long term, spurred on by the country’s strong economic growth and the looming 2014 World Cup and 2016 Olympic Games.
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