Brazilian airline GOL, which calls itself the largest low-cost airline in Latin America, announced Friday it was closing its subsidiary Webjet, which it acquired a year ago, and laying off 850 people.
"GOL communicates from this date, the start of the process of closing the activities of its subsidiary Webjet," the company said in a statement that also confirmed the dismissal of 850 employees, including technical, commercial and maintenance workers.
GOL said Webjet operated a fleet of aging Boeing 737-300 aircraft that consumed high levels of fuel and used outdated technology.
The airline said its decision to close Webjet reflects a desire to achieve "a more efficient operation starting in 2013."
GOL announced in July 2011 it was acquiring Webjet, then a rival. At the time, the move was anticipated to increase GOL's market share of the domestic Brazilian market from 36 percent to 41 percent.
GOL ended 2011 with losses of 710.4 million reales ($424.2 million) which it blamed on high jet fuel prices it said account for 46 percent of its costs.
The company, in its bid to modernize and become more competitive, in October placed an order for 60 Boeing 737 Max airplanes, at a cost of some six billion dollars.
GOL accounted for a little more than a third of airline passenger traffic in September, with 810 flights each day to 62 destinations in Brazil, South America and the Caribbean.
The airline industry in Brazil, like the rest of the economy there, has been expanding in recent years, with the number of passengers growing by 13 percent in 2011 and by 23.5 percent in 2010.