GOL Linhas Aereas Inteligentes S.A.GOL posted a decline in air traffic for Oct 2015. Traffic – measured in revenue passenger kilometres (RPK) – stood at 3.01 billion, down 8.5% from 3.3 billion recorded a year ago.
Also, on a year-over-year basis, consolidated capacity (or available seat kilometres /ASKs) decreased 4.7% to 4 billion mainly because of a 5.1% and a 1.8% drop, respectively, in domestic and international capacity. Likewise, both domestic and international RPK for the month fell 9% and 4.7%, respectively.
Meanwhile, the load factor or percentage of seats filled by passengers fell to 75.5% from 78.6% recorded in Oct 2014. At the end of the first ten months of 2015, RPK was up 3.1% while ASK climbed 1.7%. Load factor for the same period inched up 1.1%.
Adverse conditions in the Brazilian economy coupled with foreign currency headwind, owing to the strengthening of the U.S. dollar against the Brazilian real, largely resulted in the dismal performance. Moreover, in Oct 2015, the carrier witnessed a 10.6% drop in passenger count.
We expect these adverse 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 Hawaiian Holdings Inc. HA, SkyWest Inc. SKYW and Southwest Airlines Co. LUV. Both Hawaiian Holdings and SkyWest sport a Zacks Rank #1 (Strong Buy) while Southwest Airlines carries a Zacks Rank #2 (Buy).
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