Gol has already paid for the incorporation of Smiles — and has extra synergies on the radar

Inventory unification, tax synergies and working capital have already brought BRL 1.3 billion to the airline’s cash position

One year after the incorporation of Smiles, a difficult negotiation that only prospered after a long dispute between the controllers of Gol and the minority shareholders of the loyalty program, the Constantino family airline has been able to show that the two businesses work better together.

“The acquisition paid for itself in less than a year and Smiles now earns more than in the pre-pandemic period,” Carla Fonseca told Pipeline, in her first interview since migrating from the Argentine operation to take over as CEO of Smiles.

One of the main leaders of the group — the executive accumulates the position of CXO, an area of ​​9 thousand employees that takes care of customer relations —, Fonseca recalls that the preservation of Smiles’ value was a delicate matter before the merger.

“Nobody had any doubt that it was the best for the group, but the challenge was figuring out how to do it. It was very complex to preserve the value of Smiles’ business, but I already consider it a market case”, she said.

In addition to selling more than in the pre-pandemic — Smiles approached R$ 1 billion in revenue in the second quarter, a record —, the incorporation by Gol eliminated many constraints, such as the limit for the direct sale of miles and the management of separate from the air ticket inventory.

With the unified inventory, the improvements in working capital and the synergies in the fiscal sphere, Gol has already managed to capture R$ 1.3 billion in cash. In addition, the company sees more benefits ahead and estimates that another R$3 billion in incremental cash flow could appear in the airline’s results in the coming years.

Together, Gol and Smiles can also get to know their customers better, unifying their CRM (customer relationship management software). “When they were separate, we didn’t have a single view of the customer. Each company adopted a strategy”, he recalls.

On the executive’s radar, there is an extensive list of tasks to enjoy the benefits of being one company. The list includes the unification of the customer base, with the creation of a single login to access the Gol and Smiles websites, and the unification of the service channels, which should be completed in the first quarter of 2023.

One of the main benefits can be the cross-selling between Gol and Smiles customers. Currently, the loyalty program has more than 20 million registered customers and 6 million active ones, but a large part of the users who buy tickets at Gol are not yet using Smiles.

“We started looking at these bases to look at. We still don’t have all the data, but we already know that the opportunity for cross-selling is very large”, says the CEO of Smiles.

On the stock market, Gol is worth R$ 4.3 billion. In the year, the paper falls 40%.

Source: Value Pipeline