GOL’s latest return to the US is no surprise as its 737 MAX 8s take flight

GOL’s return to the United States of America (USA) was possibly one of the worst kept secrets in the aviation industry. Back in mid-2017 the airline stated South Florida was ideal for its Boeing 737 MAX 8 narrowbodies, and now GOL plans to launch new service to Miami and Orlando in Nov-2018.

Over the past decade GOL has served Europe and the US with Boeing 767s that it inherited when it purchased Varig, and later on flights to Miami and Orlando from Sao Paulo via Santo Domingo.

Now as GOL takes delivery of its MAX 8 jets, it has the capability to operate direct service to the US. Company executives have stated the aircraft’s range allows GOL to open new markets in South America (particularly on the continent’s west coast), Central America, Southern Mexico and Southern Florida. GOL’s fleet forecast shows the airline is scheduled to take of five MAX 8s in 2018.

The airline believes its MAX jets allow it to grow “the international revenue portion of our overall mix from 14% to 15% today to around 20%”. Presently, international markets represent nearly 13% of GOL’s ASKs.

As it works to diversify its network, a return to the US is a foregone conclusion for GOL. The US represents 29% of Brazil’s departing ASKs for the week of 15-Jan-2018.

CHART – United States of America (USA) is the largest international market from Brazil accounting for more than a quarter of available seat kilometres this weekSource: CAPA – Centre of Aviation and OAG (data: w/c 15-Jan-2018)

GOL is taking a slightly different approach in its latest expansion to the US. It is operating flights to Miami and Orlando from Brasilia and Fortaleza rather than Sao Paulo. GOL is establishing a hub in Fortaleza during 2018 as Air France-KLM launches flights to the city, located in northeastern Brazil, from Paris and Amsterdam.

According to data from CAPA – Centre for Aviation and OAG, GOL is the largest airline operating in Fortaleza with a 34% ASK share and the second largest airline in Brasilia, with an ASK share of 33%. Using its strength in those two markets, GOL should leverage solid point of sale for traffic flows from Brazil. It is the leading airline in Brazil’s domestic market with a 36% market share.

The airline’s competitors on its new service to the US are American on flights from Brasilia to Miami and LATAM Airlines Brazil on Fortaleza-Miami. Both LATAM Airlines Brazil and Delta Air Lines ended service from Brasilia to Orlando in 2016.

GOL can presumably inject some low cost, high-value competition in new US markets where it has direct competitors. The airline boasts Wi-Fi, leather seats, extra legroom and free snacks for passengers. GOL’s extra legroom offering features 34in pitch and its regular seat pitch is 30in.

After fits and starts in its international network, GOL believes it has the right aircraft to return to the ever important US market. Branching out from its dependence on Brazil’s domestic network is necessary in order for GOL to diversify its revenue.