Brazil’s antitrust agency has opened an administrative proceeding into alleged pricing collusion on domestic airline routes between Gol Linhas Aéreas and LATAM Airlines Brazil.
Brazil’s Administrative Council for Economic Defense (CADE) said opening the administrative proceeding does not represent a final decision. The carriers will now be allowed to present a defense and have been asked “to file answers, specifying the evidence they consider suitable.”
CADE’s tribunal will ultimately issue a final decision on whether Gol and LATAM violated Brazilian antitrust law related to domestic flight ticket pricing.
CADE said the alleged pricing collusion occurred on “domestic routes of significant commercial importance.” Gol and LATAM are the two leading carriers in Brazil’s domestic market in terms of seats operated. LATAM holds a 38% share of domestic seats, followed by Gol at 33% and Azul Brazilian Airlines at 29%.
CADE said in a statement that its office of the superintendent general (SG) began a probe in 2023 into domestic market airline pricing, utilizing advanced data analysis. The SG’s investigation found “the existence of a pattern of interdependence between the price movements of [Gol and LATAM], which led to an analysis of whether this behavior was in line with competitive dynamics or reflected mechanisms of tacit collusion facilitated by the use of algorithms and data sharing,” CADE said.
The SG then reviewed LATAM’s and Gol’s contracts with pricing intelligence services and providers of “dynamic pricing solutions.” The SG identified that “these tools may lead to the exchange of commercial sensitive information, reducing competitive uncertainty, and increasing the potential for coordination,” CADE said.
The antitrust regulator added that “in concentrated markets with a high level of information transparency, the combined use of algorithmic tools, as well as shared data infrastructures, can increase competitive risks.”
CADE said the administrative proceeding has been opened to further the investigation into the alleged collusion, allow for “a full examination of the evidence” and ensure the right of Gol and LATAM to provide a “full answer” to CADE’s allegation.
Gol and LATAM both denied any coordination of pricing on domestic routes.
“LATAM categorically rejects any allegation of conduct contrary to free competition, a non-negotiable value for the company,” LATAM said in a statement. “LATAM reiterates that it always operates in accordance with the highest standards of compliance, transparency and integrity.”
Gol said it is committed to “free competition.”
Gol is 80% owned by Abra Group, which also includes Colombia’s Avianca and Spain’s Wamos.
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