GOL's Jan Traffic Increases Y/Y

Zacks

GOL Linhas Aéreas Inteligentes S.A. (GOL), a low-cost airline based in Latin America, reported increased air traffic for the month of Jan 2013, reaping benefits from reduced capacity in domestic markets and subsequent international expansion.

For January, the passenger revenue per available seat kilometer (:PRASK) increased by 10% as a result of the reduction in the domestic market supply. Also, the fuel prices for the month increased roughly 18% year over year.

GOL is working in an appropriate manner to strategically reduce supply in the domestic market, which led to the closure of Webjet operation in late November, last year. Following the closure, the services related to the Boeing 737-300 have been suspended, leading to a decline in the domestic market supply, to the tune of 17.8% year over year.

Operations in the international market increased 34.2% year over year in January, as a result of expansion of GOL’s operations to newer destinations like Santo Domingo, Miami and Orlando.

Recently, another airline, JetBlue Airways (JBLU), reported its traffic updates for the same period. The revenue passenger miles (RPM) for the company increased 11.2% year over year in January.

However, Southwest Airlines Co. (LUV), a Texas based airline, reported a fall in the traffic and capacity for Jan 2013. Another leading U.S. passenger carrier Delta Air Lines (DAL) displayed flat traffic growth for the same period.

Earlier this month, GOL entered into an agreement with Delta to support each other’s loyalty programs to attract more fliers to the airline. GOL is expected to report its fourth quarter and fiscal 2012 results on March 25, 2013 after the market closes. The stock currently holds a Zacks Rank #3 (Hold).

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