Brazilian low-cost and low-fare airline,
Gol Linhas Aéreas Inteligentes S.A.
) recently signed a contract to purchase from Boeing an additional
60 Boeing 737 MAX Aircraft. To be delivered by 2018, these aircraft
will enable operational efficiency through fleet modernization.
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Gol Linhas, over time, has been adopting means to enhance the
efficacy of its fleet in order to boost productivity and occupancy
rates in the quarters ahead. The company targets to achieve a fleet
size of 138 by the end of 2012, 136 by 2013 and 140 by 2014. The
fleet target for 2014 includes roughly 32 Boeing 737-700 NG and 108
Boeing 737-800 NG aircraft.
Also, of late, the company issued a second series of Guaranteed
Notes amounting to $22.7 million in order to raise money for
financing engine maintenance. The Notes carried an interest rate of
0.85% p.a. The first issue was worth $39.1 million carrying an
interest rate of 1.0% p.a. These notes with a term period of two
years were guaranteed by the Export-Import Bank of the United
States (Ex-Im Bank). The proceeds from both the issues will be used
for funding the maintenance of CFM56-7B engines by Delta TechOps,
the maintenance division of Delta Air Lines.
Furthermore, the company focuses on continuous improvement in the
ancillary services. Such services include extensive e-commerce
platform, and offer of services such as insurance, car rentals and
ticket sales from kiosks. These are expected to reinvigorate
customer demand and increase sale.
The Zacks Consensus Estimate for the third quarter of 2012 stands
at a loss of 19 cents, representing a year-over-year growth of
82.9%. Estimates for 2012 and 2013 stand at a loss of 96 cents and
earnings of 23 cents, respectively, reflecting a year-over-year
growth of 37.5% for 2012 and 124.3% for 2013.
We currently have a Neutral recommendation on GOL. The stock also
bears a Zacks #3 (Hold) Rank. The company's prime competitors
Copa Holdings SA
) currently has a Zacks #3 (Hold) Rank and
LAN Airlines S.A
) has a Zacks #5 (Strong Sell) Rank.