All eyes on GOL

Just a few years ago, Constantino de Oliveira Jr. didn’t seem like a candidate to become CEO of a major airline.

Just a few years ago, Constantino de Oliveira Jr. didn’t seem like a candidate to become CEO of a major airline. The college dropout and former Formula 3000 race car driver known to friends as “Junior” had next to no knowledge of the airline industry. Then in 2001 he launched the instantly popular budget operation GOL Línhas Aéreas Inteligentes -- “the intelligent airline.” Now, at a time when rocketing oil prices, high labor costs and stiff competition threaten the survival of major airlines -- just last month two big U.S carriers filed for bankruptcy on the same day -- Junior is announcing new routes and expansion plans.

GOL’s rapid success since its maiden flight makes Oliveira, 37, look like a mastermind, especially as Latin America’s older airlines struggle with low passenger numbers and fuel charges that make up more than half their overhead costs. GOL, now the No. 2 airline in Brazil and one of the most aggressive in the region, expects to see profits rise by more than 50 percent this year, to $255 million. Share prices have increased by 25 percent, to more than $30 a share, since the company’s 2004 IPO.

By 2006, GOL aims to increase its fleet to 54 planes, up from 42 today. Next month, GOL will be adding a route to the 42 cities it already serves: Bolivia’s Santa Cruz will become the carrier’s second international destination, following Buenos Aires. “We hope to start flying to Paraguay and Uruguay by November or December,” Oliveira says, adding that he plans to put all of South America under the company’s wings by 2010. Next year, GOL will launch a sister company in Mexico.

When he created the airline, Oliveira was inspired by such low-cost carriers as Dublin-based Ryanair and Dallas’s Southwest. He says he wanted “to create a company that would make air travel available to everyone” in a country where most people get around on creaking old buses. On Varig, Brazil’s largest airline, a round-trip flight between Buenos Aires and Rio de Janeiro costs about $300. On GOL the same ticket is closer to $200. Occasionally, GOL offers promotional $20 one-way fares between Brasília, Rio and São Paolo.

Traveling with GOL means touching down often. The airline’s system is based on a complex schedule of connections through smaller hubs and very few direct flights. Downtime is not allowed: The brand-new fleet of Boeing 737s is kept running as many as 14 hours a day, with passengers being hustled from one flight to the next. The system has been key to GOL’s success, says Oliveira, though he’s also quick to credit his staff. Getting the airline to where it is today, he says, has taken “planning, teamwork and a lot of dedication.”