LONDON – GOL Linhas Aéreas Inteligentes Brazil’s largest domestic airline has confirmed today that it has closed the transaction involving the expansion of its commercial cooperation with U.S carrier American Airlines with an exclusive codeshare agreement. The deal will see American Airlines invest the amount of $200 million dollars in 22.2 million newly issued preferred shares of GOL through a capital increase for a 5.3% participation in GOLD’s economic interest.
The agreement signed today means that American Airlines is now able to point a member onto GOL’s Board of Directors for the term of the exclusivity provided in the details of the transaction.
American Airlines Increases Footing in South America
Under this agreement, American Airlines will be able to enhance the travel opportunities for their customers, offering a seamless connection with flights from North to South America and vice versa. Back in February 2020, the two carriers entered a codeshare agreement that enabled GOL’s customers to connect to more than 30 destinations across the U.S on the American route network, with the agreement mainly focused on the operation of flights out of GOL’s main hubs in São Paulo, and Rio de Janeiro, integrating 34 options of Brazilian and international routes, such as Montevideo, in Uruguay.
While today’s announcement is more of a formality to announce the end of proceedings between the two carriers the move made by American airlines now means that it can start to focus on beating out other US airlines such as Delta Air Lines who are looking to expand their operations into one of the fastest-growing aviation markets in the world.
American Takes on Delta Air Lines For South American Market Control
Delta Air Lines has pushed hard to focus down on this expected growth in the market, with the carrier signing a codeshare agreement with LATAM in 2021, once it receives the required regulatory approval it will become one of the most comprehensive combined carrier networks through the Americas. Currently, the agreement which was expanded on November 15 2021 saw the two carriers jointly add more than 20 international routes between the US and South America to a broad number of regional and domestic destinations from their hubs in Atlanta; Santiago, Chile; Lima, Peru; Bogota, Colombia; and São Paulo / Guarulhos in Brazil.
With This move, American Airlines will now have an active financial and codeshare agreement in place to help put pressure on Delta and LATAMs codeshare plans for connections between North and South America, as it opens up a new battleground for the two U.S behemoths to battle out on.
The South American aviation market, which has an expected value of $535 Billion Dollars according to Boeings 2021-2040 market forecast report, in 2019 the U.S based manufacturer delivered 2,530 aircraft to airlines all over the South Americas which also saw an average growth of 4.8% per year making it one of the most lucrative markets for U.S airlines to expand and invest into.