Brazilian low-fare airline
GOL Linhas Aereas Inteligentes S.A.
) reported dull air traffic for Mar 2013. However, net passenger
revenue per available seat kilometer (PRASK) for the month
increased 16% year over year.
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Revenue passenger kilometers or RPK - implies revenue generated
per kilometer per passenger - for the month declined 7.8% from
the year-ago period to 2,751.2 million. International RPK
improvement of 37.0% somewhat negated lower revenues (down 11.1%)
from the domestic grounds.
Available seat kilometers (ASK) - that measures an airline's
passenger carrying capacity - fell 6.2% year over year to 4,253.6
million, with domestic decline of 9.8%. On the international
front, ASK moved up 38.3%.
Load factor on the domestic arena fell 90 basis points (bps) and
internationally, it plunged 60 bps. On a consolidated basis, the
load factor was 64.7% compared with 65.8% recorded in Mar 2012.
From Jan to Mar 2013, on a consolidated basis, GOL generated RPK
of 8.29 billion (down 12.8% year over year) and ASK of 12.32
billion (down 11.9% year over year). Load factor was 67.3%,
reflecting a decline of 60 basis points from the corresponding
period last year.
Performance within the boundaries of the country was negatively
impacted by the channeling of domestic capacity to overseas
routes and the freeze of
The Boeing Company
) 737-300 aircraft services, following the suspension of Webjet
operation, last November. The company's supply reduction strategy
that was implemented from Mar 2012 also influenced the results.
Activities in the international market remained impressive as a
result of expansion of GOL's operations to newer destinations
like Santo Domingo, Miami and Orlando. The Easter holiday season
resulted in more air traveling, benefiting the performance level
of the carrier.
In the coming quarters, we expect GOL - which has business
Delta Air Lines Inc.
) - to experience impressive results owing to route expansion
measures, lucrative acquisitions and collaborations with other
prominent market players. Moreover, the company's efforts to curb
the effect of fuel price increases as well as to maintain a low
cost structure are likely to increase profitability
However, we stay cautious due to competitive threats from other
Latin American players such as
Copa Holdings SA
), international business risks, increased operating expenses
along with lower demand and appreciation of the U.S. dollar
against Brazilian real.
GOL has a Zacks Rank #4 (Sell).