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
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?
Gol was great when it first started but it has gone way downhill. I was confounded when Delta made the deal with them and happy when they finally wised up and joined forces with Latam.
It's near impossible to buy tickets to Brazilian cities from the USA online, historically. If you want to go anywhere other than Rio or SP you end up buying two separate itineraries. This is going to be a huge change for Brazilian connectivity and is actually pretty great news. Even flying to Rio via connection is going to be a ton easier, as SP is a bit better connected, so you can fly there and then connect to Rio allowing more flexibility.
Today, try and make a reservation on the AA website where a leg involves a GOL flight and all you get is an error message. LAX to FLN. So much for the "partnership".
I actually think this is pretty exciting news. For AA elites this is as good as Gol joining OW. Free bags, priority check-in, and lounge access on cheap domestic tickets in Brazil is about all I could ask for.
"GOL it’s Brazil’s largest airline"
The pandemic change things a little bit and in 2021 the market share was (Domestic flight):
GOL is a solid (not amazing) airline. I hope they will join OW eventually.
American’s kind of a LCC at this point in terms of their product on narrow-body flights, so it only makes sense for them to partner with another LCC. The Value Alliance or U-FLY Alliance, this time in the Americas.
Except for first class
More Legroom or the same in first class (including oasis) than delta on most planes.
No bad first class row with less legroom than the other rows, like delta.
The same minimum legroom in economy as delta (including oasis)
The only network carrier with high speed WiFi full installed
Cute thought but wrong. AA is far from an LCC domestically. Hyperbole is not your friend.
Useful loyalty program with partners around the world
Membership in a global alliance
Lounges at major airports
Enormous network with most domestic routes flown more than once per day
I could go on. The whole "AA is an LCC" thing that shows up here and on other comment sections is incredibly tiresome.
I never cared for LATAM after they merged the LAN and TAM operations.....thought it was a pitiful combination. AA had been partners for years with GOL and hopefully they resume a better integrated network this time.
Air France and KLM have a small interest in GOL and also partner with them, despite Delta’s investment in LATAM.
“ GOL isn’t a full replacement for LATAM (in terms of product and global route network)”
I’m surprised you say this, lucky.
For product anyway. LATAM doesn’t have first class domestic either, GOL has more legroom than LATAM and gol also has more clubs than LATAM. Combined with aa, they’ll have a much nicer product than LATAM including clubs and international service to North America.
But LATAM has a strong presence in all Latin America, including two big hubs for international flights in São Paulo and Santiago, has a more diverse fleet...
GOL has a bussines model totally inspired in Southwest.
GOL doesn’t have the reach or market share LATAM has.
@Ben, I think the biggest benefit is the ability to use AA awards to fly to additional destinations in Brazil. Brazil is a huge country but if you are trying to get anywhere other than Sao Paulo or Rio it is not easy. As it is you will have to do two connections from most cities in the US
Bingo! Nothing else needed said about this partnership.
Yes, 100% this...it's going go be a huge deal if they execute even halfway decently. This is really exciting news. Not even just awards, but even just convenience and safety of booking one itinerary to destinations in Brazil not served by international routes (which is a ton of great cities)
How about they refund some of the salary subsidies the government paid them. What has effectively happened here is the US government has subsidized this investment. Honestly it's insane they would do this in the same calendar year when they received subsidies.