Travel

Gol backs down on Smiles merger proposal

The company made no direct reference to the coronavirus, but said it made the decision because of the extraordinary events of the past few weeks

Gol's airplane
Flights plummet as COVID-19 spreads globally. Photo: Shutterstock
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  • Gol has not made it clear whether it should analyze the re-incorporation of Smiles in the future;
  • The company’s shares, like those of other companies, fell sharply on the Brazilian stock exchange.

On Friday (13), Gol airline informed Smiles that it is canceling the company’s merger proposal, made at the end of last year.

According to Gol, the decision is due to the “extraordinary events” of the last few weeks, to its “structuring impacts in the aviation sector”, without directly saying the word coronavirus.

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After 7 years separated from Gol, Smiles would return to be part of the company, in a movement that seeks more synergy between the two operations. And the movement is not isolated, but part of a worldwide trend of (re) incorporation of programs by airlines.

In January 2019, Air Canada completed the acquisition of its Aeroplan loyalty program. For some years now Aeromexico has also been looking to buy the remaining 49% stake to control the Club Premier program.

In late 2018, Latam, the second largest player in the Brazilian market, invested around $300 million to repurchase shares of the loyalty firm Multiplus and unify Multiplus and Latam Fidelidade, the company’s loyalty program, operations, launching the new Latam Pass program in October this year.

Gol has not made it clear whether it should analyze the re-incorporation of Smiles in the future. The company’s shares, like those of other companies, fell sharply on the Brazilian stock exchange. In 30 days, the price of Gol’s papers went from BRL 35.40 to BRL 11.17 last Friday (13).