Brazilian low-cost carrier Gol has confirmed it is holding discussions with fellow LCC WebJet regarding a potential acquisition.
WebJet launched operations in 2005, and in 2007 was purchased by CVC Turismo's owner Guilerme Paulus.
In February of this year WebJet registered for an initial public offering on Sao Paulo's Bovespa stock exchange, and filings related to the IPO showed in 2010 the carrier recorded a $13 million net profit on sales of roughly $500 million.
At that time WebJet also stated in 2011 it planned to add seven Boeing 737-300s to the 24 already in its operation.
Gol's apparent interest in WebJet follows negotiations between Ryanair and WebJet in late 2010 for the Irish low cost carrier to take a stake in WebJet pending legislation to raise foreign ownership in Brazilian airlines from 20% to 49%.
Gol's discussions with WebJet occur against a backdrop of robust demand for domestic travel in Brazil. The country's domestic traffic grew 29% in May, according to estimates from the country's civil aviation authority ANAC.
WebJet is among many fast-growing Brazilian carriers that include Azul, Trip and Avianca-Brazil. For the January-May time period, Azul had a roughly 8% market share, while Webjet's share was 5.4%. Trip recorded a 2.7% share while Avianca Brazil took a 2.6% share. During the same time frame Gol's share fell from 41% to 37.5% year-over-year, while TAM's share remained relatively flat, inching up to 43% in 2011 from 42.2% in 2010.
Gol's main rival TAM during the last couple of years has moved to partner with some of Brazil's smaller carriers through its 2009 acquisition of Pantanal and an announcement earlier this year of its intent to acquire a 31% stake in Trip.
If Gol is successful in acquiring WebJet, it would follow the 2007 purchase by Gol of Varig.