Leading Latin American airline,
GOL Linhas Aereas Inteligentes S.A.
) posted soft traffic results for Aug 2013. However, net
passenger revenue per available seat kilometer (PRASK) for the
month increased 24% year over year, resulting in the 17th
consecutive monthly PRASK rise.
Revenue passenger kilometers or RPK - implying revenue
generated per kilometer per passenger - for the month decreased
11.5% from the year-ago month to 2,728.6 million. Although
international RPK showed an improvement of 17.0%, domestic
activities fell 13.8%.
Available seat kilometers (ASK) - that measures an airline's
passenger carrying capacity - slipped 5.1% year over year to
4,119.8 million. Home ground capacity slipped 7.6%, while on the
international front, ASK increased 22.4%.
Domestic and international load factor decreased 4.8% and
2.8%, respectively, while the consolidated load factor declined
The company's not-so-impressive performance in August was due
to a 9% rise in fuel prices against the comparable month of last
year. The rise was primarily attributable to the depreciation of
Brazilian real against dollar in Aug 2013. The company also
expects fuel price to increase further over the next few months
given the strength of dollar.
Aligning with the current macroeconomic situation, GOL's
decision of decreasing the supply in the domestic market from 7%
in Aug 2012 to 9% in Aug 2013 impacted the carrier's capacity.
Additionally, the increased number of flights to Santo Domingo,
with 85% of available seats for sale in the company's 737-800 NG
aircraft put pressure on its load factor.
To cope with the disappointing results, GOL is consistently
taking steps to enhance its operations. The company is making
attempts to increase its operations at Viracopos Airport, in
Management plans to start six new daily flights from the city
in Sao Paulo, including five to Santos Dumont in Rio de Janeiro
and one to Brasília, from September. GOL has recently enhanced
its loyalty program by establishing a new mileage accrual model
for domestic and international flights.
We believe that GOL's growth initiatives that include
streamlining of supply, introduction of new routes, expansion of
overseas operations, collaboration with other carriers such as
Delta Airlines Inc.
) and purchase of modern and superior jets will aid the company
to perform better going forward.
GOL - which operates with other industry players such as
Copa Holdings SA
) has a Zacks Rank #3 (Hold). Another stock worth mentioning
within this sector is
Hawaiian Holdings Inc.
), which currently carries a Zacks Rank #1 (Strong Buy).
COPA HLDGS SA-A (CPA): Free Stock Analysis
DELTA AIR LINES (DAL): Free Stock Analysis
GOL LINHAS-ADR (GOL): Free Stock Analysis
HAWAIIAN HLDGS (HA): Free Stock Analysis
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