Brazil’s Gol Starts Low-Fare Airline in Mexico

Brazilian Airline Gol announced that it executed definitive agreements related to the joint venture to create a low-cost airline headquartered in Mexico.

The joint venture is formalized by means of the incorporation of a Mexican-controlled holding company named Controladora Prosea S.A. de C.V., in which Gol will hold 25.0% of the voting capital stock and approximately 47.6% of the total capital stock, the remaining capital being subscribed by Mexican investors.

The holding company will own the capital stock of a newly-created airline operating company, which has already filed a concession request with the Mexican authorities. 

The procedures regarding the necessary concessions and administrative permits should be concluded in the near future, with the beginning of the new company’s operations expected in mid-2006.

The new company will, at first, operate in the Mexican domestic market, adopting the successful "low-cost, low-fare" business model of Gol in South America. 

Gol will render consulting services, in areas such as schedule planning, flight operations control, safety procedures, aircraft maintenance, revenue management and accounting, cargo administration and IT solutions.

Additionally, Gol will directly participate in the governance of the new holding company, appointing three members of the nine-member board of directors and participating in management committees where Gol’s recognized expertise will enable the best application of Gol’s business model.  The selection process of the company’s CEO and top executives has been initiated.

The initial capitalization of the holding company will be US$ 40 million, with approximately US$ 19 million to be invested by Gol.  The operating company intends to independently acquire the aircraft it will operate and expects to announce its initial fleet composition within the next three months.

"We are excited about our partnership with Gol Airlines, and believe that the company will bring innovation and more affordable air travel to the Mexican market," stated Fernando Chico Pardo, on behalf of the group of Mexican entrepreneurs and investors leading the project.  "We expect the unique combination of the Gol model with our local knowledge to be a formula for long-term success."

"We believe our business model is the right one for Mexican standards, we have formed a joint-venture with the right partners, and now is the right time to take this project forward.  We are confident that the Mexican population will benefit from the entry of a low-cost carrier, permitting further growth and development in the market," stated Gol’s President and Chief Executive Officer, Constantino de Oliveira Jr. 

"We expect that the adoption of Gol’s management and operating model, successful in the Brazilian market and, now, in the South American market, will contribute to the success of the new Mexican company."

Gol Linhas Aéreas Inteligentes, a "low-cost, low-fare" airline, is one of the most profitable and fastest growing airlines in the industry worldwide. Gol operates a simplified fleet with a single class of service. 

The Company has one of the youngest and most modern fleets in the industry resulting in low maintenance, fuel and training costs, with high aircraft utilization and efficiency ratios.

Gol  – www.voegol.com.br

Tags:

You May Also Like

Red Tape Prevents Brazil from Becoming Global Industrial Giant

Apex Brazil, the Brazilian Export and Investment Promotion Agency, intends to define before the ...

Brazil in Recession, with Industry Due to Shrink 1.7% in 2014

Industrial-activity data released this week added to worries that Brazil’s economy, already in recession, ...

Brazil Spends More with Indians, But They Still Have No Voice

An analysis of specific actions in favor of indigenous peoples in the Brazilian budget ...

How Trade Diversification Saved Brazil and Neighbors from the Worst

As the G-20 meeting is about to begin in London, the outlook for Latin ...

Romi Made Brazil’s First Car. Now It Exports to Over 60 Countries

The history of Indústrias Romi S.A. is intertwined with the history of the machinery ...

A Great Time to Be Capitalist in Brazil

Increase in revenues, reduction of debts and record profits. Facts like these were part ...

After a Two-Year Ban, Brazilian Beef Allowed in China Again

Brazilian Agriculture minister Neri Geller just announced that the Chinese government has agreed to ...

Dollar Fall Scares Brazilian Industry

Exports by the Brazilian textile industry may be damaged by the depreciation of the ...

Brazil’s Largest Party, the PMDB, Will Not Have Presidential Candidate

The PMDB, the Brazilian political party with the largest number of both deputies and ...

Lula in Tehran Avoids Press and Keeps Mum on Iran’s Nuclear Issue

After a full day of meetings with Iranian President Mahmoud Ahmadinejad and nearly an ...