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New airline democratizes Brazil's skies

Discounter Gol Airlines to expand across South America.

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In an age when airlines are going bankrupt faster than you can say Chapter 11, some might say that starting one in a developing nation like Brazil was a brave decision.

But since taking off in January 2001 with just six planes and seven destination cities, Gol Airlines has proven itself a worthy successor to the US and British discounters that founder Constantino de Oliveira Jr. used as templates. The youthful Mr. Oliveira sought to create affordable travel by "taking a bit of Southwest, a bit of Ryanair, a bit of JetBlue, and Easyjet and tropicalizing them for the Brazilian market," he says.

Just don't expect the stewardesses to dress up like Carmen Miranda.

The result has been nothing short of the democratization of Brazil's friendly skies, helped out by a partnership with US aircraft-maker Boeing - the first of its kind for a Latin American carrier. "Around 10, 11 percent of our passengers are flying on planes for the first time in their life," says Oliveira, a former race-car driver and onetime head of one of Brazil's largest bus companies. "People think a low-cost airline is for poor people, but it isn't; it's for people who have an eye for competitive prices," he says.

The company whose name means "goal" now boasts 31 planes, travels to 41 destinations, and has 22 percent of Brazil's domestic passenger market. It turned a profit of $145 million last year.

In a nation where even the 50-minute flight from Rio de Janeiro to São Paulo on the major carriers costs more than the country's $120 monthly minimum wage, Gol charges just $79.

Gol was fortunate to start operating when regulatory conditions were favorable, the price of modern telecommunications equipment was falling, and a large number of experienced workers were looking for employment. But the São Paulo-based company also aggressively cut costs, swapping steak dinners and booze for sandwiches and soft drinks, and allowing tickets to be booked over the Internet.


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