GOL Linhas Aereas Inteligentes S.A.GOL posted a decline in air traffic for the month of August this year. Traffic - measured in revenue passenger kilometres (RPK) - stood at 3.05 billion, down 2% from 3.12 billion recorded a year ago.
Also, on a year-over-year basis, consolidated capacity (or available seat kilometres /ASKs) inched down 0.3% to 4.04 billion mainly because of a 0.6% drop in domestic capacity. However, international capacity improved 2.2%. Likewise, international RPK for the month inched up 3.5% while the domestic figure fell 2.8%.
Meanwhile, the load factor or percentage of seats filled by passengers fell to 75.7% from 77% recorded in Aug 2014. GOL's strategy to trim down domestic capacity may allow it to improve the load factor.
At the end of the first eight months of 2015, RPK hiked 5.3% while ASK climbed 3%. Load factor for the same period inched up 1.7%.
Adverse conditions in the Brazilian economy coupled with foreign currency headwinds owing to the strengthening of the U.S. dollar against the Brazilian real have largely resulted in the dismal performance. Moreover, in Aug 2015, the carrier witnessed a 7.5% drop in passenger count.
Meanwhile, we expect such factors to prevail in the near future as well.
Zacks Rank & Stocks to Consider
GOL Linhas currently carries a Zacks Rank #4 (Sell). Better-stocks in the same industry are JetBlue Airways Corp. JBLU , Ryanair Holdings plc RYAAY and Delta Air Lines DAL . All three sport a Zacks Rank #1 (Strong Buy).
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