South American prominent airline
GOL Linhas Aereas Inteligentes S.A.
) displayed disappointing traffic results for Apr 2013. However,
net passenger revenue per available seat kilometer (PRASK) for
the month increased 8% year over year.
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Revenue passenger kilometers or RPK - implying revenue generated
per kilometer per passenger - for the month declined 10.6% from
the year-ago month to 2,700.9 million. Although international RPK
showed an improvement of 17.5%, domestic operation recorded lower
revenues (down 12.7%).
Available seat kilometers (ASK) - that measures an airline's
passenger carrying capacity - fell 3.9% year over year to 4,051.4
million. Home ground capacity dropped 6.9%, while on the
international front, ASK moved up 31.2%.
Load factor on the domestic arena as well as international field
fell 450 basis points (bps) and 680 bps, respectively. On a
consolidated basis, the load factor was 66.7%, down from 71.6%
recorded in Apr 2012.
For the first four months of 2013, on a consolidated basis, GOL
generated RPK of 10.99 billion (down 12.2% year over year) and
ASK of 16.38 billion (down 10.0% year over year). Load factor was
67.1%, reflecting a decline of 170 bps from April last year.
The company's poor performance was primarily due to the effects
of the transfer of domestic capacity to overseas routes and the
The Boeing Company
) 737-300 aircraft services, following the suspension of Webjet
operation, last November. The company's strategy to reduce supply
- implemented in Apr 2012 - along with changes in pricing trends
also influenced the results.
Moreover, various risk factors such as competitive threats from
players such as
Copa Holdings SA
), international business risks, increased aircraft maintenance
costs and lower demand remain major roadblocks for the company.
Nevertheless, we believe that management's growth initiatives
that include streamlining of supply, introduction of new routes,
expansion of overseas operations and purchase of modern and
superior jets will aid the company to register higher revenue and
earnings in the coming months.
GOL - which entered into a codeshare agreement with
) - holds a Zacks Rank #3 (Hold).