Low cost airline
GOL Linhas Aereas Inteligentes S.A.
) is seeking to expand its operations between Brazil and the U.S.
The carrier has made a formal request to Brazilian Civil Aviation
Agency (ANAC) to run a regular service between Campinas (Brazil)
and Miami (U.S.), with a scheduled stop at Santo Domingo
The Brazilian carrier wants to provide the service on Mondays,
Wednesdays and Saturdays and plans to use
The Boeing Co.
) B-737 next generation aircraft for the service. GOL expects to
start the operations by the end of Jul 2014, provided it gets
approval from ANAC.
The Brazilian city of Campinas is located in the Sao Paolo
state and together with its metropolitan area, has a total
population of 2.23 million. On the other hand Miami, which is
also known as the ''Capital of Latin America" has a large
Hispanic population. We believe Miami will not only increase
GOL's U.S. exposure, but will also draw many tourists from
Campinas to the "Magic City", which is famous for its
GOL is concerned that higher-than-expected fuel prices will
increase its expenses in 2014 and eventually affect operating
profit. Other risks, such as competition, subdued global economy,
increased aircraft maintenance costs and high debt could affect
the company's performance.
However, Brazil will host the 2014 football world cup and 2016
summer Olympics, two of the biggest sporting extravaganzas. The
events are expected to attract around 600,000 international and 3
million domestic visitors this year, presenting a big opportunity
for passenger carriers like GOL.
GOL recently declared mixed financial results for the fourth
quarter of 2013, with the top line beating the Zacks Consensus
Estimate, while the bottom line missing the same. The quarter's
results were hurt by a decline in domestic supply, record jet
fuel prices and depreciation of Brazilian real against the
GOL - which operates with other industry players like
Copa Holdings S.A.
) - has a Zacks Rank #3 (Hold). Better-ranked stocks within this
Southwest Airlines Co.
), which sports a Zacks Rank #1 (Strong Buy).
BOEING CO (BA): Free Stock Analysis Report
COPA HLDGS SA-A (CPA): Free Stock Analysis
GOL LINHAS-ADR (GOL): Free Stock Analysis
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