Leading Latin American airline,
GOL Linhas Aereas Inteligentes S.A.
) posted soft traffic results for Jul 2013. However, net
passenger revenue per available seat kilometer (PRASK) for the
month increased 18% year over year resulting in highest PRASK
increase in the last couple of years.
Revenue passenger kilometers or RPK - implying revenue
generated per kilometer per passenger - for the month decreased
9.8% from the year-ago period to 3,109.0 million. Although
international RPK showed an improvement of 18.2%, domestic
activities fell 12.6%.
Available seat kilometers (ASK) - that measures an airline's
passenger carrying capacity - slipped 1.9% year over year to
4,387.3 million. Home ground capacity dropped 4.8%, while on the
international front, ASK inched up 26.4%.
Domestic and international load factor decreased 8.1% and
6.5%, respectively, while the consolidated load factor declined
The company's not-so-impressive performance was due to a 4%
rise in fuel prices as against the comparable period of last
year. The rise is primarily attributable to the depreciation of
Brazilian Real against Dollar in Jul 2013. The company also
expects record fuel prices for the next few months given the
strength of dollar. 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
To cope with the disappointing results, GOL is consistently
taking steps to enhance its operations. The company is in
attempts to increase its operations at Viracopos Airport, in
Campinas. Management plans to start six new daily flights from
the city in Sao Paulo, including five to Santos Dumont/RJ and one
to Brasília, from September. GOL is also contemplating to start a
new itinerary between Brazil and Nigeria, in Africa.
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 register higher revenues and earnings in the coming
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
U.S. Airways Group 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
US AIRWAYS GRP (LCC): Free Stock Analysis
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