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GOL Linhas' (GOL) July Traffic Rises, Load Factor Falls

GOL Linhas Aereas Inteligentes S.A. GOL announced traffic results for July.  Traffic – measured in revenue passenger kilometers (RPK) — increased 6.3% to 3.65 billion in Jul 2017 from 3.44 billion, recorded a year ago.

On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) expanded 7.9% to 4.46 billion, thanks to a rise of 7.9% and 8%% in domestic and international capacity, respectively. Domestic and International RPK for July also appreciated 5.8% and 10.2%, respectively. The carrier further witnessed a 4.9% increase in passenger count for the same month.

On the other hand, load factor – percentage of seats filled by passengers – decreased 130 basis points (bps) to 81.9% in July due to capacity expansion exceeding traffic growth.

At the end of the first seven months of 2017, RPK inched up 1.5%, while ASK slipped 0.9%. Load factor for the same period improved 190 bps. The company however, recorded a 7.3% reduction in the number of seats in the first seven months of 2017 and volume of departures fell 7.6%.

The company recently reported second-quarter earnings numbers. The carrier’s earnings of 24 cents per share compared favorably with the Zacks Consensus Estimate of a loss of 60 cents. However, the bottom line contracted 51% on a year-over-year basis due to higher expenses on aircraft fuel. Net revenue, comprising cargo and passenger revenues, came in at $696.2 million (R$2.2 billion), up significantly year over year. 

Despite stiff competition from peers like Copa Holdings S.A. CPA, LATAM Airlines Group S.A. LTM and Azul SA AZUL in the Latin American space, the company is expected to perform well in the near term, driven by its restructuring efforts.

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Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
 
Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
 
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AZUL SA (AZUL) : Free Stock Analysis Report
 
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