Zacks_Analysts' Blog : GOL Inks Codeshare MOU - Analyst Blog

GOL Linhas Aereas Inteligentes S.A. (GOL) has recently announced signing of a Memorandum of Understanding with the Argentinean airline, Aerolineas Argentinas, for the implementation of a codeshare agreement.

The agreement has been aimed at offering their clients the benefits of their respective mileage programs, GOL's SMILES and Aerolineas Argentinas' Aerolineas Plus. It is further expected to strengthen GOL’s presence in the Argentinean market and intend to offer the best cost effective journey for the customers.

GOL operates 78 flights per week, the highest number of flights, to Buenos Aires, Cordoba and Rosário. Moreover, eleven daily flights operate from Brazil to the Argentinean capital.

On the other hand, Aerolíneas Argentinas is one of the largest airlines in South America operating 19 international flights in the Americas, Europe and the South Pacific along with the domestic ones. In accordance with the sector’s procedures, the agreement will be submitted for analysis and approval of both countries’ Civil Aviation Agencies and Brazil’s Antitrust Authority (CADE).

With the code share agreement, both the companies aim to offer a large number of flights to their passengers plying between Argentina and Brazil. Moreover, GOL's clients will now be able to accumulate and redeem miles with its Partner Company, which, in turn, is expected to boost essential business travel and domestic tourism.

Of late, GOL Linhas received approval from the National Civil Aviation Agency (ANAC) to conclude its acquisition of Webjet Linhas Aéreas S.A. for R$96 million ($61.53 million), according to the Memorandum of Understanding executed on July 8, 2011. The August Traffic Update for the company recorded a rise in domestic demand by 14.1% whereas, a reduction of 20.2% in international demand, year over year.

Gol Linhas competes directly with its peers, such as Copa Holdings SA (CPA), LAN Airlines S.A (LFL), and TAM S.A (TAM).