October 22, 2020
Smiles was launched as the airmiles program of Brazilian airline Varig and became independent after Varig’s acquisition by GLA. Today, it serves numerous retailers, banks, airlines, hotels, restaurants and rental companies as loyalty scheme operator.
GLA (GOL Linhas Aéras) is a low-cost Brazilian passenger and cargo airline incorporated in 2001. It has a fleet of 127 aircraft and a network of 61 national and international destinations. GLA had acquired Varig in 2007.
In 2020, GOL Linhas Aéras made a public offer to acquire Smiles Fidelidade SA, and the merger required the valuation of both of their assets. For the valuation of the trademarks, appraisal firm Apsis Empresarial used comparable data from MARKABLES and concluded on appropriate royalty rates of 4% on revenues for SMILES, and 0.6% on revenues for GLA. Please read the full valuation report (in Portuguese) submitted to the shareholders of Smiles in March 2020 here.
For a detailed analysis of trademark valuation and royalty rates in the airline industry, please read this post here.