Gol's New Partnership with Localiza - Analyst Blog

By Zacks | February 04, 2013 AAA

Recently, GOL Linhas Aéreas Inteligentes S.A. (GOL), the largest airline in Latin America, announced its tie-up with Localiza Rent a Car, a South American car rental company. Per the agreement, customers will be able to book a car on rent in GOL's website while purchasing an air travel ticket. This step is taken by the company to make travel easier, hassle free and economical for its customers. The service starts today, Feb 4, making it possible to rent a car simultaneously with buying an air ticket.

The customers will benefit from the tie-up, as they will be able to obtain a discount of 20% on the daily rental rates for the car. The passengers are also offered a range of cars classified under group A, economic, to Group C, economic with air conditioning and hydraulic steering to choose from. However, these discounts and upgrades can only be availed of if the car is booked through Gol's website.

Around 2 weeks ago, Gol announced strong air traffic update for Dec 2012, with increased passenger revenue per available seat kilometer (PRASK) of 14%, year over year. This tie-up is expected to increase the turn over of passengers, starting Feb 2013 and strengthen the PRASK further.

Gol has its operations in 10 countries through 65 airports, while Localiza has a fleet of over 107 thousand cars in 8 countries. Through the partnership the services will be delivered in 51 domestic airports.

Gol currently bears a Zacks Rank #3 (Hold). Other stocks which are worth considering in the industry are Ryanair Holdings Plc. (RYAAY), holding a Zacks Rank #1 (Strong Buy), as well as Southwest Airlines Co. (LUV) and China Eastern Airlines Corp. Ltd. (CEA); each holding a Zacks Rank #2 (Buy).

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