Brazil's Gol Linhas Aereas denied on Monday a report of takeover talks with Qatar Airways, after hopes of a deep-pocketed investor in the Brazilian airline sent shares soaring.
Brazilian news magazine Veja reported over the weekend that Gol's management met last week with executives from fast-growing Qatar Airways. Veja did not say how it obtained the information.
A spokeswoman for Gol denied the contents of the Veja report, which said discussions of an investment in the struggling Brazilian airline were still in early phases.
The magazine said Qatar Airways is looking to take over Gol with the same kind of merger that allowed Chile's LAN Airlines to gain control of Brazil's No. 1 carrier TAM, forming giant regional giant LATAM Airlines.
Gol shares jumped near 11 percent in opening trading before paring gains to 6 percent, the biggest daily increase in six weeks.
The stock has lost nearly 60 percent in two years as higher fuel prices and a poorly-timed growth plan have led to steep losses.
Gol lost 710 million reais ($350m) in 2011 and has forecast an operating loss in 2012 as executives expect fuel costs and a weaker local currency to continued dragging on performance.
"If there isn't a change in control I don't see an improvement in the type of results that (Gol) has been presenting in recent quarters," said Fabio Gonçalves, an analyst at Banrisul brokerage in Porto Alegre.
The airline is cutting back its fleet and aims to slash 2,500 jobs this year. But its model of a low-cost airline faces challenges in a country with expensive labor, cumbersome taxes and crowded airports.
In December, Delta Air Lines Inc bought a 3 percent stake in Gol and appointed a representative to the Brazilian carrier's board of directors. Delta has said throughout the year that it is not considering an increased stake in the airline.For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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