Hey Guys,

I was thinking about GOL business model and when we compare it whit some well established LCC airlines it is possible to identify some differences:

01 – GOL offers food on board of its flights and it is free. Of course this food is a small snack with some juices or soft drinks. EasyJet, Ryanair don’t offer anything.

02 – GOL flies to some cities in which a LCC shouldn’t be flying to (BSB – PVH for instance). It is against one of the basic principles of LCC philosophy, which is, only flying for high density routes.

03 – It is possible to book connecting flights and re-schedule flights. Ryanair clearly states they are not responsible for any connecting flight, for instance. Their responsibility is only taking you from A to B.

04 – Their fares aren’t as cheap as it used to be at the beginning of their operations. Of course they are still cheaper then JJ or RG, but comparatively higher then before. In competitive routes their prices are low (I booked a flight GRU-GIG-GRU for 33,00 UDS each leg), but on those less noble routes their prices are comparatively higher than it should be.

I have a friend who was a manager at GOL at its beginning and he told me that their business plan changed dramatically from the original idea. For instance, they were considering to fly to Jacarepaguá (Rio de Janeiro), a small airport, not to SDU or GIG. CPQ would be their main hub in São Paulo, not CGH. They would largely use their buses companies to take passenger to these airports.

However, everything changed when Transbrasil collapsed. They smartly saw a great opportunity to get market share and TR passengers wouldn’t fly them if they were a real LCC airline. Passengers would massively migrate to VP.

I understand that GOL has many advantages over their competitors (JJ and RG) and its justify their success. For instance:

01 – A new company with no old debt;

02 – New employees with small labor costs;

03 – An aggressive use of technology, which makes their costs smaller

Finally, from passengers view GOL needs only a frequent flyer programme to be equal to JJ and RG.

What I conclude is that GOL is a mix between a LCC and a full service airline. I think we are seeing a new model of airline in the LA region and do hope they succeed on this venture.

Hugs,

EMB195ER