A SNAPSHOT IN TIME: GOL's November Network

Brazilian carrier Gol will next month launch its first flights to the US as it seeks to broaden its activities away from its home market.  In the past the carrier has been rather domestically intrinsic with only limited expansion into international skies.  And, when the carrier has taken the steps to fly across foreign boundaries it has been quick to retreat back into the safety of the Brazilian domestic market.  Who can blame a carrier when demand for air travel is growing so quickly in the developing South American country and has supported the carrier’s rise from a small low-cost carrier to one of the country’s most prominent airlines.

Airlines in the Brazilian market have become the envy of domestic operators across the globe.  Since 2000 annual departures have increased 53.8 per cent to over one million for the first time ever this year.  This is an annual average growth of 4.5 per cent.  Meanwhile, capacity has increased 107.4 per cent to almost 140 million annual seats, an average rate of growth of 9.0 per cent.  This has been mainly all too keep to keep pace with the fast growing demand from the country’s expanding middle class.

This month Gol holds a 36.9 per cent share of domestic seat capacity in Brazil, slightly more than its biggest rival TAM Airlines (34.4 per cent).  However, when you focus on the international market things are very different.  Gol has just an 8.8 per cent share of international capacity from Brazil, a market that is dominated by TAM Airlines (22.8 per cent). 

Gol first introduced its own branded international flights in October 2005.  Since then it has served 14 destination markets from 10 points across Brazil, but its network currently consist of non-stop links to nine airports in eight cities across six countries.  These comprise Asuncion, Paraguay; Buenos Aires, Cordoba and Rosario, Argentina; Caracas, Venezuela; Montevideo, Uruguay; Santa Cruz, Bolivia and the Caribbean island of Barbados in the Lesser Antilles.  It offers almost 500 flight departures providing 90,088 seats, approximately 2.3 per cent of the size of its domestic network.  This clearly shows the bias towards domestic flying in the Gol network strategy.

After first exploring the idea of serving the US market via the Venezuelan capital Caracas, Gol will instead launch flights via Santo Domingo in the Dominican Republic, developing a hub concept at Las Américas International Airport and enabling connections from multiple points in the Brazilian and US markets.  The airline will initially offer daily flights between Rio de Janeiro and Miami and between Sao Paulo and Orlando from December 15, 2012, with passengers able to switch aircraft at Santo Domingo.

Although the US market will be a new adventure for Gol, the carrier does have a history of serving the market following its acquisition of the assets of Brazil’s former flag carrier Varig from VRG in March 2007 following its sale to the company at a bankruptcy auction the previous year.  Varig had previously offered flights to Atlanta, Chicago, Las Vegas, Los Angeles, New York and Miami prior to ending services in July 2006 ahead of its closure.

In the table below we highlight Gol’s network of scheduled flights this month and compare this with the same month last year.  Despite the growth of the Brazilian market, as our analysis shows that Gol’s overall seat capacity is actually down 9.3 per cent in November 2012 versus the same month last year.  There have been notable capacity declines at many of its larger markets such as Rio De Janeiro Galeão–Antonio Carlos Jobim International, Salvador Luis Eduardo Magalhaes, Porto Alegre Salgado Filho and Recife Guararapes International, although growth has continued at its Sao Paulo Congonhas International base (up 1.7 per cent) and at other top ten network points: Rio De Janeiro Santos Dumont (13.0 per cent) and Curitiba Afonso Pena International (1.4 per cent). 

GOL SCHEDULED AIR SERVICES (non-stop departures; November 2012)

Rank

Airport

Departures

Available Seats

% Network Capacity

Seat Change Capacity (vs 2011)

1

Sao Paulo Congonhas International (CGH)

3,170

525,560

12.7 %

1.7 %

2

Sao Paulo Internacional Guarulhos (GRU)

2,702

467,088

11.2 %

(-4.4) %

3

Brasilia Presidente Juscelino Kubitschek (BSB)

2,252

378,986

9.1 %

-9.90 %

4

Rio De Janeiro Galeão–Antonio Carlos Jobim International (GIG)

1,873

319,352

7.7 %

(-18.1) %

5

Rio De Janeiro Santos Dumont (SDU)

1,477

253,608

6.1 %

13.0 %

6

Belo Horizonte Tancredo Neves (CNF)

1,423

231,474

5.6 %

(-8.6) %

7

Salvador Luis Eduardo Magalhaes (SSA)

1,137

202,408

4.9 %

(-14.3) %

8

Curitiba Afonso Pena International (CWB)

1,178

195,912

4.7 %

1.4 %

9

Porto Alegre Salgado Filho (POA)

966

166,944

4.0 %

(-20.2) %

10

Recife Guararapes International (REC)

723

122,102

2.9 %

(-26.6) %

11

Fortaleza Pinto Martins (FOR)

630

111,160

2.7 %

(-15.5) %

12

Florianopolis Hercilio Luz (FLN)

558

93,432

2.2 %

2.1 %

13

Vitoria Eurico Sales (VIX)

589

84,896

2.0 %

0.8

14

Belem Val De Cans (BEL)

484

77,976

1.9 %

(-10.5) %

15

Goiania Santa Genoveva (GYN)

463

71,272

1.7 %

(-3.8) %

16

Manaus Eduardo Gomes International (MAO)

353

60,312

1.5 %

(-27.3) %

17

Campinas Amarais (CPQ)

303

50,392

1.2 %

(-6.8) %

18

São Luis Marechal Cunha Machado (SLZ)

286

47,104

1.1 %

(-25.6) %

19

Natal Augusto Severo (NAT)

240

44,160

1.1 %

(-26.2) %

20

Campo Grande (CGR)

229

39,896

1.0 %

(-16.8) %

21

Cuiba Marechal Rondon (CGB)

219

39,256

0.9 %

(-26.0) %

22

Navegantes (NVT)

261

37,584

0.9 %

15.5

23

Buenos Aires Ezeiza Ministro Pistarini (EZE)

204

36,496

0.9 %

(-22.8) %

24

Maceio Palmares (MCZ)

176

29,984

0.7 %

(-1.5) %

25

Porto Seguro (BPS)

160

28,400

0.7 %

69.6 %

(Others)

2,686

438,424

10.6 %

(-16.8) %

TOTAL

24,742

4,154,178

-

(-9.3) %

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