Gol - The Rise and Fall, Part I
- Peter Berlin
- Jun 2
- 2 min read
In the year 2000, air travel in Brazil was very different. Three full-service, legacy carriers - VARIG, VASP and Transbrasil - owned 70% of the domestic market. Airfares were high, far too expensive for most Brazilians - and only about 2% of the country's 165 million people had ever flown on an airplane. BUT the market had tremendous potential to grow if the price was right.
Enter a man named Constantino de Oliveira Júnior, son of Nene Constantino - who owned the biggest bus company in Brazil. He could have stayed in the road transport industry, but he had bigger ambitions. He had money, and a vision - to make air travel more affordable and accessible to millions.
In the year 2001, he made his dream a reality when he launched GOL Linhas Aéreas Inteligentes ("Intelligent Airlines"). Gol utilized the same principles as other successful low cost carriers - Southwest, Ryanair, jetBlue and easyjet - to keep operating expenses low. They only flew one type of plane, they only had one class of service, and they leveraged technology - from their website, e-ticketing system, revenue management, etc. - to make flying more efficient for everyone involved.
By virtue of the fact they had zero low-cost competition, they effectively put VARIG, VASP and Transbrasil out of business and by 2006 they had captured a third of the domestic market... all while generating 15%+ operating margins, no small feat in the airline industry.
Meanwhile, they had gone public in 2004 and their stock price had more than tripled by 2006. Constantino Júnior had become an even richer man... worth over a billion dollars. But the coming years would bring a series of challenges that would cause the airline's stock to lose 75% of its value.
Come along as we explore Gol's founding story up until the the 2007-2008 timeframe, when a complex acquisition and new competition threw a bit of a wrench in their plans to become the undisputed market leader in Brazil.
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