GOL buys Varig

March 28, 2007 | By More

The sky seems to be the limit for Brazilian airline GOL. The latest giant step on its continuous expansion is the announcement of the purchase of (the healthy part of) Varig. The move still needs to be approved by the Brazilian government, and for the time being what we know is that both companies will continue to operate separatedly.

I don’t know whether this is good or bad news. GOL and TAM hold now 85% of the market of civil aviation in Brazil. GOL is far less of a low-cost than most people think. Yes, they have amazing off-season promotions (so do TAM), but their average fares are quite similar to those of TAM (as you can see on this blog’s fare check section). While at the same time providing low-cost service. The good news is that it seems there is now a future for Varig – and an end to the endless injection of public money into an ailing company.

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