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Gol Linhas’ (GOL) Traffic Rises in August, Load Factor Dips


Gol Linhas Aereas Inteligentes S.A. GOL reported unimpressive traffic figures for August. Traffic, measured in revenue passenger kilometers (RPK), inched up a mere 0.1% to 2.99 billion. While domestic RPK climbed 1.8%, international RPK dropped 13.2%.

On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) expanded 1.7% to 3.89 billion. Domestic ASK improved2.7% while international ASK declined 6%. The carrier witnessed a 3.2% rise in passenger count. Load factor (percentage of seats filled by passengers) fell to 76.9% from 78.2% in the year-ago period as capacity expansion outpaced traffic growth.

At the end of the first eight months of the year, Gol Linhas generated RPK of 25.22 billion (up 3.6%) and ASK of 31.76 billion (up 3.3%). Consequently, load factor increased 20 basis points to 79.4% in the period.

Gol Linhas Aereas Inteligentes S.A. Price

Gol Linhas Aereas Inteligentes S.A. Price | Gol Linhas Aereas Inteligentes S.A. Quote

Even though passenger traffic is anticipated to rise going forward on the back of solid demand for air travel, escalating fuel prices are a cause for concern. With fuel accounting for the major share of airline expense, a hike in its price pushes up costs and affects bottom-line growth in the process. Not surprisingly, the uptrending fuel prices have caused the company to raise fuel price per liter view for 2018 to R$2.9 compared with R$2.5, expected earlier. Consequently, the company now expects a loss per share of R$1-R$1.20 in the year. Previously, it anticipated earnings in the range of R$0.90-R$1.10.

Zacks Rank & Key Picks

Gol Linhas carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are SkyWest, Inc SKYW, C.H. Robinson Worldwide, Inc. CHRW and Trinity Industries, Inc. TRN. While C.H. Robinson holds a Zacks Rank #2 (Buy), SkyWest and Trinity sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest, C.H. Robinson and Trinity have rallied more than 62%, 32% and 20%, respectively, in a year.

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