GOL has executed definitive agreements for a joint venture to create a low-cost airline headquartered in Mexico.
The joint venture is formalised by means of the incorporation of a Mexican-controlled holding company named Controladora Prosea S.A. de C.V., in which GOL will hold 25 percennt of the voting capital stock and approximately 47.6 percent of the total capital stock, the remaining capital being subscribed by Mexican investors.
The holding company will own the capital stock of a newly-created airline operating company, which has already filed a concession request with the Mexican authorities. The procedures regarding the necessary concessions and administrative permits should be concluded in the near future, with the beginning of the new company’s operations expected in mid-2006.
The new company will, at first, operate in the Mexican domestic market, adopting the successful “low-cost, low-fare” business model of GOL in South America. GOL will render consulting services, in areas such as schedule planning, flight operations control, safety procedures, aircraft maintenance, revenue management and accounting, cargo administration and IT solutions.
Additionally, GOL will directly participate in the governance of the new holding company, appointing three members of the nine-member board of directors and participating in management committees where GOL’s recognized expertise will enable the best application of GOL’s business model. The selection process of the company’s CEO and top executives has been initiated.
The initial capitalization of the holding company will be US$40 million, with approximately US$19 million to be invested by GOL. The operating company intends to independently acquire the aircraft it will operate and expects to announce its initial fleet composition within the next three months.
“We are excited about our partnership with GOL Airlines, and believe that the company will bring innovation and more affordable air travel to the Mexican market,” stated Fernando Chico Pardo, on behalf of the group of Mexican entrepreneurs and investors leading the project. “We expect the unique combination of the GOL model with our local knowledge to be a formula for long-term success.”
“We believe our business model is the right one for Mexican standards, we have formed a joint-venture with the right partners, and now is the right time to take this project forward. We are confident that the Mexican population will benefit from the entry of a low-cost carrier, permitting further growth and development in the market,” stated GOL’s President and Chief Executive Officer, Constantino de Oliveira Jr. “We expect that the adoption of GOL’s management and operating model, successful in the Brazilian market and, now, in the South American market, will contribute to the success of the new Mexican company.”