American Airlines bolsters South America presence with GOL partnership, reciprocal benefits

American Airlines has long been the largest U.S. carrier in South America and is committing to maintaining that position despite increasing competition.

The Fort Worth, Texas-based carrier on Wednesday announced plans to invest $200 million in the Brazilian carrier GOL, for a 5.2% stake in the company. Along with that, the two carriers will expand their codeshare partnership into an exclusive agreement between the U.S. and Brazil and roll out enhanced loyalty benefits.

This news comes less than two years after American lost its long-standing partnership with the Latin American giant LATAM Airlines to Delta Air Lines. Meanwhile, Delta had to ditch its stake in GOL in favor of the new tie-up.

American Airlines - GOL codeshare agreement

American Airlines and GOL have already been codeshare partners since early 2020. As a part of the tie-up, the airlines are able to offer passengers greater connectivity to far-flung destinations and more efficient pricing. However, the airlines are now taking their relationship a step further.

"This codeshare agreement between two of the leading airlines in the Americas combines our highly complementary route networks to offer customers a seamless travel experience with the largest number of flights and destinations in North and South America," said GOL CEO Paulo Kakinoff. "We believe that this will bolster GOL's presence in international markets, accelerate our long-term growth, and maximize value for our shareholders. It adds to our confidence in GOL's growth as the economy reopens and travel demand increases."

The airlines also expect to increase commercial cooperation to accelerate growth and create a more seamless travel experience. American operates flights to 17 cities in South America, including flights to Sao Paulo (GRU) and Rio de Janeiro (GIG) from Dallas-Fort Worth (DFW), Miami (MIA) and New York-JFK. Meanwhile, GOL currently serves 63 destinations in Brazil and is the country's largest airline.

This enhanced partnership comes alongside American's codeshare agreement with the Chile and Argentina-based ultra low-cost carrier JetSmart. These partnerships will appeal especially to potential customers who are visiting the U.S. as American recently revealed that two-thirds of passengers on its flights to and from South America are based there.

Related: 6 ways my loyalty to American Airlines is now paying off

Enhanced loyalty program benefits

What's perhaps more exciting for customers is that American and GOL are expanding their joint loyalty offerings.

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A couple of months after the partnership first launched, the airlines rolled out reciprocal mileage earning and redemption benefits. Exactly as it sounds, this means that you could seamlessly earn and redeem miles across both airlines, though there have been some limitations. For example, you could only earn credit toward AA elite status on GOL flights ticketed by American Airlines and you currently need to call to redeem American miles for GOL awards.

However, these drawbacks could become a thing of the past soon. The airlines revealed that they "expect to offer an enhanced joint loyalty offering to give customers more ways to earn and redeem miles.

Further, the airlines will roll out reciprocal loyalty perks for elite members.

Come 2022, GOL's SMILES and American's AAdvantage elite members will gain access to perks like priority check-in, priority security, priority boarding, a larger checked baggage allowance, lounge access and preferred seats across both airlines.

As of April 27, 2021, AA elites can now also earn their usual elite bonus miles on GOL Airlines marketed flights.

Related: Maximizing redemptions with American Airlines AAdvantage

Bottom line

South America remains a key market for American Airlines. With today's news, American has affirmed that it's committed to offering more seamless bookings and loyalty benefits for passengers traveling between the U.S. and Brazil. This is increasingly important as Delta and LATAM double down on their Miami "gateway hub" and increase connections between the regions.