GOL Linhas Posts Increase in December Traffic and Load Factor

GOL Linhas Aéreas Inteligentes S.A. GOL reported impressive traffic figures for December 2018. Load factor (percentage of seats filled by passengers) improved as traffic growth outpaced capacity expansion.

Consolidated traffic, measured in revenue passenger kilometers (RPK), increased 5.9% year over year to 3.9 billion. Domestic RPK rose 3% and international RPK rallied 31.8%. On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) expanded 3.2% to 4.7 billion. While international ASK expanded 33.7%, domestic ASK slipped 0.5%. The carrier posted 5.8% rise in passenger count. Consolidated load factor increased to 83.3% from 81.1% in the year-ago period. However, departures in the month inched down 1.8%.

For 2018, RPK and ASK were up 3.1% and 2.9%, respectively. Also, load factor inched up 0.2 percentage points (pp) to 79.9% on a year-over-year basis. Volume of departures inched down 0.3%, while number of seats rose 2.4%.

The traffic report apart, GOL Linhas was able to make the headlines news recently due to fleet modernization efforts. The carrier plans to expedite fleet renewal process with Castlelake and Apollo Aviation by replacing 13 Boeing 737 Next Generation (NG) aircraft with Boeing 737 MAX-8 aircraft in the next few years. The sale of these 13 737-800 NGs will lower the Brazilian carrier’s net debt by approximately R$1.1 billion. The 737 MAX-8 aircraft is expected to increase average seat per aircraft and reduce incremental cost per seat. Also, the increased number of 737 MAX-8 aircraft will enable the carrier to expand network with international flights to the United States and Mexico.

Zacks Rank & Stocks to Consider

GOL Linhas carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Zacks Transportation sector are Spirit Airlines, Inc. SAVE, Triton International Limited TRTN and Azul S.A. AZUL. While Triton carries a Zacks Rank #2 (Buy), Spirit Airlines and Azul sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Triton, Spirit Airlines and Azul have gained 5.4%, 48.1% and 76.8% in the past six months, respectively.

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