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 Business News | July 2005 
Gol To Provide Cheaper Air Fares
 Wire services
Gol Linhas Aereas Inteligentes SA, Brazil's No. 3 airline, said it agreed to team with businessman Fernando Chico Pardo to set up a low-cost carrier in Mexico.
Sao Paulo-based Gol and Chico Pardo's Inversiones y Tecnicas Aeroportuarios SA de CV agreed to set up the budget airline with flights set to start from the second quarter of 2006, the company said in a statement to the Sao Paulo stock exchange.
Gol sees similar opportunities in Mexico to those it identified in Brazil in 2001 when it began undercutting more expensive rivals such as Viacao Aerea Rio-Grandense SA, said Ricardo Fernandez, senior equity analyst at ING Bank NV in Sao Paulo. Gol expects to boost its share of the Brazilian market to more than 30 percent this year from 26 percent now, Constantino de Oliveira Junior, its president, said in an June 27 interview.
"The Mexican venture could be very good because there seem to be good opportunities for them to offer better pricing," Fernandez said in a telephone interview.
OTHER COMPETITORS
Gol and Chico Pardo may face competition from as many as five companies as they seek to profit from Latin America's second-biggest domestic civil aviation market.
ABC Interjet and Aerolineas Mesoamericanas are about to obtain concessions from the Mexican government, adding to Vuela and Avolar Aerolineas, which already obtained approval this year, Aaron Dychter, a deputy transportation minister, said June 22. Click Mexicana, a unit of government-controlled Mexicana de Aviacion, began operations in May and was Mexico's first low-cost airline.
Gol preferred shares fell 50 centavos, or 1.4 percent, to 34.3 reais on the Sao Paulo stock exchange. |
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