Airline Gol posts 7th quarterly loss; Brazil outlook flat

Reuters

By Roberta Vilas Boas

SAO PAULO, Nov 13 (Reuters) - Shares of Gol Linhas Aereas tumbled to a two-month low on Wednesday afterBrazil's second-largest airline posted its seventh straightquarterly loss and forecast no rebound in the domestic marketnext year.

Gol reported a net loss of 197 million reais ($85 million)in the third quarter, compared to a loss of 309 million reais ayear earlier, according to a late Tuesday filing.

After slashing flights within Brazil by about 5 percent in2012 and 9 percent this year due to weak demand and soaring fuelcosts, Gol said in a separate filing it plans to keep the sizeof its domestic network unchanged next year.

"The adjustments made in the domestic market this year haveled the company's supply to a size compatible with the economicscenario expected for 2014," Gol said in the filing.

Gol shares fell as much as 9 percent in Sao Paulo to theirlowest since early September before recovering to a 7 percentdrop in afternoon trading.

The rocky earnings and glum outlook reinforced concernsabout the ability of Brazil's airlines to handle an onslaught offoreign fans during the 2014 World Cup. Shrinking domesticoperations have led tourism officials to suggest allowingforeign carriers to run routes within Brazil during thetournament - a proposal opposed by the aviation minister.

Gol plans to continue its push into more profitableinternational routes, expanding foreign flights by 5 percent to8 percent next year, chief executive Paulo Kakinoff toldanalysts on a conference call to discuss earnings.

By flying more internationally and keeping a lid on domesticcapacity, Kakinoff said there was room for Gol to continueincreasing its average ticket prices next year.

Earnings before interest and taxes, a gauge of operatingprofit known as EBIT, rose to 37 million reais in the thirdquarter, compared with an operating loss of 201 million reais ayear ago. But analysts said the result was bolstered largely bynew leasing arrangements.

"Excluding sale lease-back operations (on some planes), EBITwould have been negative 5.4 million reais in the thirdquarter," wrote Itau BBA analyst Renata Faber in a client note.

Rates

View Comments (0)