American Airlines has had to completely reimagine its Latin America strategy in the past couple of years. American used to have a close partnership with LATAM, but all of that changed when it was announced that Delta would buy a stake in LATAM, and the airline would leave oneworld.
We’ve seen American launch a partnership with GOL, and we’ve seen American invest in JetSMART and form a partnership with the airline. In September 2021 it was announced that American would invest in GOL, and that deal has now been completed. We now have a bit more info about what we can expect in terms of frequent flyer reciprocity.
American has bought 5.2% stake in GOL
American Airlines has invested $200 million in GOL, in the form of purchasing 22.2 million newly issued preferred shares of the airline. With this, American now owns a 5.2% stake in GOL.
With this investment and expanded partnership, we can expect further commercial cooperation in the areas of purchasing, sales tools, and systems integrations. American is also able to appoint one member to GOL’s board of directors, who is granted membership and participation on GOL’s alliance committee and any other committee related to the partnership between American and GOL.
For those of you not familiar with GOL, it’s Brazil’s largest airline. The low cost carrier operates a fleet of around 140 Boeing 737s, and the airline is poised to grow even further, with over 100 Boeing 737 MAXs still on order.
American & GOL expand codeshare agreement
It was first announced in early 2020 that American Airlines and GOL would introduce a codeshare agreement, making it easy for passengers to book itineraries that include travel on both airlines. With American’s investment, the airlines have taken that a step further — American and GOL have entered into an exclusive codeshare agreement.
This means that for a period of at least three years, GOL will be American’s sole codeshare partner in Brazil, and American will be GOL’s sole codeshare partner in the United States. I mean, I suppose it’s great that the airlines have pledged codeshare monogamy, but I’m not sure there’s any consumer benefit here?
American & GOL expand loyalty program offerings
Most exciting for consumers is that American AAdvantage and GOL SMILES are expanding their loyalty offerings in 2022 (though we don’t know anything about the timeline beyond it being this year):
- American AAdvantage and GOL SMILES members will have full reciprocal mileage earning and redemption opportunities
- American AAdvantage and GOL SMILES elite members will receive reciprocal recognition, including priority check-in, priority security, priority boarding, a larger checked baggage allowance, lounge access, preferred seats, etc.
Rather oddly, here’s how American is now describing this frequent flyer arrangement:
American’s AAdvantage and GOL’s SMILES loyalty programs will create the largest joint frequent flyer program in the Americas with enhanced benefits for customers.
I can’t imagine the two airlines are actually forming a “joint frequent flyer program,” though maybe there’s a bit more to this than just reciprocal elite perks, mileage earning, and mileage redemption.
My take on this expanded cooperation
Bigger picture, it’s kind of funny to step back and look at how GOL’s partnerships with US airlines have evolved:
- American had a partnership with GOL until 2012
- Delta bought a stake in GOL in 2011, causing GOL to cut ties with American
- Then Delta dumped its stake in GOL in late 2019 after buying a stake in LATAM, leaving GOL on the market
- In 2020 American announced a partnership with GOL
- Then in 2021, American announced it would buy a stake in GOL
How do I feel about this investment and expanded cooperation between American and GOL?
- GOL isn’t a full replacement for LATAM (in terms of product and global route network), but this is certainly better than nothing, especially as we see closer loyalty program collaboration between American and GOL; it would be great to be able to redeem miles on GOL, and receive reciprocal elite perks
- Personally I consider the GOL cooperation to be more exciting than the JetSMART cooperation, as the former airline is a bit more premium, much larger, and has a more robust route network
- It’s interesting to see how much investing airlines have done in the past year after receiving tens of billions of dollars in taxpayer support
Bottom line
American Airlines has completed its investment in GOL< and now owns a 5.2% stake in the Brazilian airline. This is American’s latest effort to rebuild its Latin America network after losing the LATAM partnership. This is American’s second investment in the region in the past year, as American also purchased a stake in JetSMART (which primarily operates out of Argentina and Chile).
In addition to this, American and GOL have committed to an exclusive codeshare agreement, and the two airlines will also roll out reciprocal elite perks at some point this year.
What do you make of American’s investment in GOL?
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