American Airlines on Wednesday announced that it would invest $200M in Brazilian airline GOL that represents roughly 5% stake, and the airlines would form an exclusive partnership.
American Airlines AAdvantage and GOL Smiles elite members will benefit from the enhanced loyalty partnership that will expand in 2022 to priority services such as greater luggage allowance, priority check-in and boarding, and preferred seats on the plane.
Here’s the announcement from AA:
American Airlines and GOL to Form an Exclusive Partnership That Will Create Best Network and Loyalty Program Across the Americas
- Carriers have entered into an exclusive codeshare agreement that will deepen their partnership and strengthen the largest network between the U.S. and Brazil.
- American’s AAdvantage and GOL’s SMILES loyalty programs will create the largest joint frequent flyer program in the Americas with enhanced benefits coming in 2022.
- Increased commercial cooperation will drive sustainable growth, including more flights to more destinations for both airlines.
FORT WORTH, Texas — Today, American Airlines announced that it has entered into a letter of intent to further solidify its partnership with GOL, Brazil’s largest airline. Building on the two carriers’ initial codeshare offering in 2020, the expanded partnership includes an exclusive codeshare agreement, a larger and more lucrative joint SMILES and AAdvantage® loyalty program partnership. It also expects to increase commercial cooperation with GOL to accelerate growth and create a more seamless experience for all customers.
“American has long been the leading U.S. carrier to South America and our stronger partnership with GOL solidifies that leadership position,” said Robert Isom, President of American Airlines. “Our long-haul network marries seamlessly with GOL’s strong domestic network in Brazil. Together, we will be able to offer customers flying to, through and from Brazil, access to the largest network with the lowest fares and the Americas’ biggest and best joint travel loyalty program.”
Exclusive Codeshare between the U.S. and Brazil
GOL will become American’s sole codeshare partner in Brazil and American will become GOL’s sole codeshare partner in the U.S. On their combined networks, customers can travel to more than 30 destinations served by American in the U.S. and more than 20 new destinations in South America served by GOL.
“This codeshare agreement between two of the leading airlines in the Americas combines our highly complementary route networks to offer customers a seamless travel experience with the largest number of flights and destinations in North and South America,” said GOL CEO Paulo Kakinoff. “We believe that this will bolster GOL’s presence in international markets, accelerate our long-term growth, and maximize value for our shareholders. It adds to our confidence in GOL’s growth as the economy reopens and travel demand increases.”
American has served Latin America since 1942 and offers service to 17 destinations in South America, including Sao Paulo (GRU) and Rio de Janeiro (GIG) in Brazil, from its U.S. hubs in Dallas-Fort Worth (DFW), Miami (MIA) and New York (JFK). American has flown more than 14 million customers between the U.S. and Brazil in the last 10 years – more than twice as many as any other U.S. carrier. GOL serves 63 destinations in Brazil and is the country’s largest airline.
Enhanced Joint Loyalty Offering
The largest network in the Americas will also be the most rewarding for travelers. In 2022, GOL’s SMILES and American’s AAdvantage loyalty members will gain access to their elite benefits such as priority check-in, priority security, priority boarding, a larger checked baggage allowance, lounge access and preferred seats on both airlines. The two airlines also expect to offer an enhanced joint loyalty offering to give customers more ways to earn and redeem miles.
The strengthened relationship will also allow for further commercial cooperation in areas such as purchasing, sales tools and systems integrations, as allowed by regulatory and contractual limitations. American will have the right to appoint one member to GOL’s board of directors, who, in addition to other duties, will be granted membership and participation on GOL’s Alliance Committee and any other board committees related to the operational partnership between GOL and American.
American will invest US$200 million in 22.2 million newly issued preferred shares of GOL in a capital increase, for a 5.2% participation in the Company’s economic interest. The completion of the agreements described in this press release, including the proposed equity investment are subject to conditions, including the negotiation, execution and delivery of definitive documentation, regulatory approvals and other customary closing conditions.
American Airlines got caught with its pants down when Delta took a stake in LATAM, which used to be AA’s partner and Oneworld alliance member. It has airlines around Latin America in countries such as Brazil, Chile, Peru, and Colombia. Unfortunately, a partnership with GOL doesn’t offer the same level of benefits to frequent fliers.
GOL is pretty much only a domestic Brazilian airline. However, it flies to limited international destinations in Latin America and serves cities in Florida through one-stop flights via the Caribbean.
GOL is probably the least favorite of the big Brazilian airlines of Azul, GOL, and LATAM, although there is very little difference between the last two on intra-Brazil flights. My preferred airline for domestic flights within the country is Azul that has partnered with United.
Obviously, GOL is better than nothing for American Airlines AAdvantage members, but AA made a mistake when it didn’t step in and invest in LATAM instead.