Delta invests in Brazilian carrier Gol

Delta invests in Brazilian carrier Gol

Image via Markus Mainka / Shutterstock.com

Delta Air Lines is to purchase up to $56 million in preferred shares of GOL as part of a larger rights offering by the Brazilian carrier.

In addition to the equity, Delta will guarantee up to $300 million in borrowings by GOL under a term loan with third-party lenders.

Delta’s guarantee will be secured by GOL’s interest in its publicly-traded loyalty programme, Smiles.

Delta and GOL have also agreed to extend a commercial agreement for flights between the US and Brazil, the largest aviation market in Latin America.

This transaction details emerged came as the US carrier and shareholder in Virgin Atlantic saw pre-tax profits grow by $202 million to $1.6 billion in the quarter to June over the same period last year.

However, revenue on transatlantic routes was down by 6.9% to $1.5 billion as capacity increased by 5.1%.

Delta president Ed Bastian said: “Our commercial initiatives continue to gain traction in the marketplace and we will produce summer margins in excess of any achieved in our history.

“However, unit revenue growth is an important component of our long-term plan to expand margins.

“We continue to project flat system capacity growth for the fourth quarter of 2015 – a level in line with current demand expectations, which should put the business on the right trajectory to stem the erosion in unit revenues by the end of the year.”

Comments

This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travel Weekly.
By posting your comments you agree to accept our Terms & Conditions.

More in News