By Gabriel Araujo

SAO PAULO France's Thales SA will provide maintenance services for Brazilian airline Gol in Brazil instead of abroad, the companies outlined on Tuesday in a deal that aims to cut turnaround time and lower costs.

Under the deal, Gol Linhas Aereas Inteligentes SA, as the airline is formally known, will no longer need to ship its Thales equipment to the United States or France for maintenance, as they will now be repaired at a Thales plant near Sao Paulo.

Thales supplies avionics to Gol, which has a fleet of roughly 120 Boeing aircraft, and to local rival Azul, which mainly operates Airbus and Embraer aircraft.

The offshoring of manufacturing work is a sensitive political issue in France, where President Emmanuel Macron last year met business leaders to try to convince them to keep more work in Europe despite soaring energy costs.

But analysts say the aerospace industry has long maintained global networks for the servicing of previously manufactured parts in an effort to reduce costs.

Gol and Thales did not disclose financial details of their deal, but the carrier's director of maintenance, Fernando Miwa, said Thales' investments in Brazil would provide local operators with an opportunity to cut costs.

"The market for this type of service in Brazil is still very limited," Miwa said.

Thales, which had expanded its plant in Sao Bernardo do Campo in 2021 to be able to provide such services, said the deal would allow Gol to reduce turnaround time, pay in local currency and receive support in its own time zone.

Turnaround time is expected to be cut to two days from 30 previously, the French company said, estimating Gol to save around 60% in logistics and taxes. The plant could also serve other Latin American airlines in the future, it added.

The contract is initially set to last for three years but could be extended.

(Reporting by Gabriel Araujo; Editing by Stephen Coates)