If low-cost airlines such as Gol (or Southwest Airlines, JetBlue, and Ryanair) focus such attention on low cost, is this a commodity service that can easily be competed against by even lower costs? Or is this a business model that is difficult to copy for other companies? What if American Airlines or Delta decided to offer a lower-cost option. Would they then compete against Gol or just cannibalize their own higher-service offerings?

  

  

      

  

        
 

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Gol Linhas Aéreas Inteligentes S.A ("Gol Intelligent Airlines S.A.," also known as VRG Linhas Aéreas S/A) is a tropical version of JetBlue Airways Corporation and Ryanair Ltd., the low-cost, no-frills airlines based in the United States and Ireland, respectively. Gol is based in Comandante Lineu Gomes Square, São Paulo, Brazil. The company is the second-largest Brazilian airline after TAM Linhas Aéreas (TAM Airlines) by both market size and fleet size. TAM Airlines is a subsidiary of the Chil- ean LATAM Airlines Group, and Gol competes in Brazil and other Latin American countries with the LATAM Established in 2001, Gol adopted the low-cost model so effectively pioneered mainly by the U.S.-based South- west Airlines and refined by companies such as JetBlue and Ryanair. Gol sells discount tickets, mainly using the Internet as the customer interaction platform. The com- pany targets price-sensitive business travelers in Brazil's rapidly growing market for air travel (demand for air travel is growing at roughly twice the rate of the coun- try's gross domestic product, GDP). From a financially driven standpoint, Gol standardized its fleet on a single aircraft model, Boeing's 737 series. It started with no airport clubs or frequent flyer programs, cabins were single class, and light snacks and beverages replaced meals. Since those beginnings in 2001, Gol has Group, Brazilian Azul, and Colombian Avianca Hold- ings S.A. Gol has about 36 percent of the domestic Brazilian airline business. Gol Linhas Aéreas Inteligentes S.A ("Gol Intelligent Airlines S.A.," also known as VRG Linhas Aéreas S/A) is a tropical version of JetBlue Airways Corporation and Ryanair Ltd., the low-cost, no-frills airlines based in the United States and Ireland, respectively. Gol is based in Comandante Lineu Gomes Square, São Paulo, Brazil. The company is the second-largest Brazilian airline after TAM Linhas Aéreas (TAM Airlines) by both market size and fleet size. TAM Airlines is a subsidiary of the Chil- ean LATAM Airlines Group, and Gol competes in Brazil and other Latin American countries with the LATAM Established in 2001, Gol adopted the low-cost model so effectively pioneered mainly by the U.S.-based South- west Airlines and refined by companies such as JetBlue and Ryanair. Gol sells discount tickets, mainly using the Internet as the customer interaction platform. The com- pany targets price-sensitive business travelers in Brazil's rapidly growing market for air travel (demand for air travel is growing at roughly twice the rate of the coun- try's gross domestic product, GDP). From a financially driven standpoint, Gol standardized its fleet on a single aircraft model, Boeing's 737 series. It started with no airport clubs or frequent flyer programs, cabins were single class, and light snacks and beverages replaced meals. Since those beginnings in 2001, Gol has Group, Brazilian Azul, and Colombian Avianca Hold- ings S.A. Gol has about 36 percent of the domestic Brazilian airline business.

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Solution Lowcost airlines is a business strategy that is difficult to copy and creates a sustainable competitive advantage for the airlines like South... View the full answer