Back to top

Image: Bigstock

Gol Linhas' (GOL) September Traffic Down, Unveils Q3 Outlook

Read MoreHide Full Article

GOL Linhas Aereas Inteligentes S.A. reported unimpressive traffic figures for September 2018, with load factor (percentage of seats filled by passengers) declining as traffic contracted, in spite of capacity expansion.

Traffic, measured in revenue passenger kilometers (RPK), declined 1% to 2.96 billion. Domestic RPK contracted 0.5% and international RPK plunged 4.6%. On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) expanded 1.8% to 3.79 billion. Domestic ASK improved 2.4%, while international ASK slid 2.9%. Load factor dipped 78.1% from 80.2% in the year-ago period. Departures in the month declined 2%.

At the end of the first nine months of 2018, both RPK and ASK were up 3.1%. Load factor for the period were flat at 79.3%. Volume of departures inched up 0.5% and the number of seats rose 2.6%.

Q3 Outlook

The Sao Paulo, Brazil-based carrier expects operating margin between 5% and 5.5% in the third quarter, down approximately 7 percentage points (pp) on a year-over-year basis. EBITDA (Earnings before interest, tax, depreciation and amortization) margin is estimated in the 11-11.5% range. Also, operating cash flow is predicted in the R$450-500 million band. The carrier will release third-quarter 2018 results on Nov 1.

Gol Linhas’ focus on capacity discipline and revenue management strategies has been driving results. Owing to this tailwind, the company anticipates third-quarter passenger unit revenues (PRASK) to expand in the 4.5-5% range. Unit revenues (RASK) are projected to increase between 4% and 4.5%.

Additionally, non-fuel unit costs (CASK ex-fuel) are expected to decline around 2.5% year over year in the to-be-reported quarter. Total capacity (ASK) is projected to grow approximately 4% year over year. Total number of seats is also anticipated to rise around 5%.

Zacks Rank & Key Picks

Gol Linhas carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader Transportation Sector are Canadian Pacific Railway Ltd. (CP - Free Report) , Southwest Airlines Co. (LUV - Free Report) and Trinity Industries, Inc. (TRN - Free Report) . While Canadian Pacific and Southwest Airlines carry a Zacks Rank #2 (Buy), Trinity sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Canadian Pacific, Southwest Airlines and Trinity have gained 23.5%, 12% and 21%, respectively, in the past six months.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Southwest Airlines Co. (LUV) - free report >>

Canadian Pacific Kansas City Limited (CP) - free report >>

Trinity Industries, Inc. (TRN) - free report >>

Published in