SAO PAULO, BRAZIL — The French MRO Company Thales is slated to provide maintenance services for the Brazilian airline Gol within Brazil, in lieu of overseas, according to the companies' announcement on Tuesday. This arrangement aims to reduce turnaround time and decrease costs.

As per the agreement, Gol Linhas Aereas Inteligentes SA, the airline's official name, will no longer need to ship its Thales equipment to the United States or France for maintenance. Instead, it will be serviced at a Thales facility near Sao Paulo.

Thales provides avionics to Gol, which operates a fleet of approximately 120 Boeing aircraft, as well as to local competitor Azul, which primarily uses Airbus and Embraer aircraft.

The outsourcing of manufacturing work is a politically sensitive topic in France, where President Emmanuel Macron met with business leaders last year in an attempt to persuade them to keep more work in Europe despite escalating energy costs.

However, analysts suggest that the aerospace industry has long maintained global networks for the servicing of previously manufactured parts as a cost-reduction strategy.

While the financial specifics of the deal between Gol and Thales were not disclosed, Gol's maintenance director, Fernando Miwa, indicated that Thales' investments in Brazil would afford local operators an opportunity to lower costs.

Miwa stated that the market for this type of service in Brazil remains quite limited.

Thales, which expanded its Sao Bernardo do Campo plant in 2021 to provide these services, stated that the deal would enable Gol to reduce turnaround time, make payments in local currency, and receive support within its own time zone.

According to the French company, the expected turnaround time will be reduced from 30 days to just two, resulting in an estimated savings of around 60% in logistics and taxes for Gol. The plant could potentially also serve other Latin American airlines in the future, Thales added.

The contract is initially set to last for three years, but there is potential for extension.