Gol to Add Caribbean Flights, Expand Across Brazil

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Gol to Add Caribbean Flights, Expand Across Brazil

Unread post by bimjim » Thu Jun 25, 2009

http://www.bloomberg.com/apps/news?pid= ... OakbQTBBbg

Gol to Add Caribbean Flights, Expand Across Brazil (Update1)
By Fabiola Moura and Heloiza Canassa

June 24 (Bloomberg)

Gol Linhas Aereas Inteligentes SA, Brazil’s second-largest airline, is adding routes to the Caribbean and smaller domestic cities while scaling back flights in the rest of South America as demand slows, Chief Executive Officer Constantino de Oliveira Jr. said.

“The flow between Brazil and South America had a noticeable reduction,” Oliveira said in an interview today in New York. “The Brazilian market is the biggest driver of growth in South America.”

Gol, based in Sao Paulo, will start flights next month to Punta Cana in the Dominican Republic and the islands of Curacao and Aruba in the Netherlands Antilles. The airline also plans to begin operations to the Brazilian cities of Bauru, about 300 kilometers (187 miles) west of Sao Paulo, as well as Aracatuba and Montes Claros.

Oliveira said Gol is reorganizing its routes after posting losses every quarter last year because of costs related to the takeover of Varig in March 2007, and the more than doubling of oil prices between the acquisition and July 2008. Gol, which already dropped flights to Europe and North America, suspended its flights to Lima, the capital of Peru, and reduced the frequency of its flights to Santiago, Chile, he said.

‘Mistakes’

“We made some mistakes, or the situation changed, for example, in international flights,” Oliveira said. “So we backed out and focused more in the domestic market.”

Oliveira was in New York to meet investors and ring the closing bell of the New York Stock Exchange on the fifth anniversary of Gol’s initial public offering.

Gol fell 1.1 percent to 10.68 reais in Sao Paulo trading. Its shares have climbed 7.8 percent this year compared with a 32 percent rise for Brazil’s benchmark Bovespa stock index and 4 percent gain for the airline’s bigger Brazilian rival, Tam SA.

The airline recently agreed with Chicago-based Boeing Co. to postpone the delivery of “some” planes to between 2011 and 2014 from the planned 2010 to 2011, Oliveira said. “We noticed today we have space to increase usage of our fleet,” he said.

Gol expects to report profits this year after shifting routes and offering additional services, such as selling food on board and enabling passengers to reserve hotels, rent cars and buy insurance on its Web site as a way to diversify revenue sources and keep fares low, Oliveira said.

The number of “economically active” Brazilians, or those who work and earn money, grew to 90 million from 60 million in the last few years, he said. Among those, 15 million travel by airplane, Oliveira said.

“It is a market that can double its size every four, five years, but this depends, of course, on the economy in general and on our capacity to keep demand stimulated,” he said.

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Re: Gol to Add Caribbean Flights, Expand Across Brazil

Unread post by bimjim » Thu Jun 25, 2009

http://www.flightglobal.com/articles/20 ... vices.html

Gol to launch Caribbean services
By Brendan Sobie
DATE:24/06/09
SOURCE:Air Transport Intelligence news

Brazil's Gol is planning to expand its network into the Caribbean for the first time with flights initially to Aruba, Curacao and Punta Cana, and potentially Santo Domingo and St Maarten.

Gol CEO Constantino de Oliveira Junior says the low-cost carrier plans to launch in July flights to three Caribbean destinations - the Dutch islands of Aruba and Curacao and the Dominican Republican resort of Punta Cana. The services will initially operate twice per week for the Northern Hemisphere summer season but could be expanded to a more frequent year-round service.

"We'll start during the [peak] season and we'll check out the demand," Oliveira told ATI today during an interview in New York. "We'll test the market and see."

Oliveira says tour operators have committed to large blocks of seats on the new Caribbean flights, but Gol intends to seek scheduled rather than charter traffic rights where possible. This will allow Gol to sell through its website and other distribution channels those seats that are not sold as part of packages by the tour operators.

"For some of them we'll apply for scheduled flights, but it is a kind of tourist flight," Constantino says. "There will be a lot of tour operators."

He says Aruba and Curacao will be served from Brasilia on a single flight operating twice weekly following a circle routing. Gol has not yet decided on the origin for the Punta Cana flight, which will also be operated twice weekly.

"[For Punta Cana] we're still dealing with some tour operators to decide whether to go from Sao Paulo or Brasilia or Manaus. There are three possibilities," Constantino says.

The Caribbean is a new market for Gol, which currently serves 49 destinations in Brazil and 10 destinations in other South American countries. Constantino says the Caribbean has a lot of potential not only for tourist flights but some destinations, such as Santo Domingo in the Dominican Republic, also have strong year-round business demand.

"Santo Domingo is another destination we're looking at for sure. They have nine million people living there. It's a great destination," Constantino says.

He adds "St Maarten is a potential market" Gol is also currently evaluating.

Currently there are very few flights connecting the Caribbean and South America except for Venezuela and virtually none between the Caribbean and Brazil. According to Innovata, there are no scheduled flights from Brazil to Aruba, Curacao or St Maarten, and there is only one weekly link between Brazil and the Dominican Republic. This is a flight from Santo Domingo to Belem in northern Brazil with intermediate stops in other Caribbean islands operated by regional carrier Air Caraibes.

Despite the lack of scheduled services connecting the Caribbean and South America, business ties between the two regions are increasing, and the number of South Americans holidaying in the Caribbean is also rising. In response to this demand, earlier this year Taca Peru launched service to Santo Domingo and Havana.

Panama's Copa, which offers convenient connections throughout South America via Panama City, also has been expanding its Caribbean network with services launched last year to Aruba and Trinidad.

Gol is interested in expanding its network to the Caribbean as it looks for new international markets within a five-hour flight time of Brazil's major cities. Last year the carrier dropped all of its long-haul services, which were operated by a now grounded fleet of Boeing 767s. That leaves the carrier with an all-737 fleet, which by year end will consist exclusively of -700s and -800s.

"In terms of international flights our limit is the range of the 737," Constantino says.

But he points out with all-narrowbody fleets Latin carriers are able to cover all of Latin America and the Caribbean. "Look at Copa and TACA. They cover all of the Americas."

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