Back to top

Analyst Blog

GOL Linhas Aéreas Inteligentes S.A. (GOL - Analyst Report)), the largest low-cost and low fare airline in Latin America, is shutting down the operations of its subsidiary, Webjet. The discontinuation of the brand will lead to a loss of around 850 jobs, including those of flight & cabin crew and maintenance personnel.

The company is of the opinion that the fleet of the subsidiary is no more viable as per the new cost standards of the Brazilian sector. Webjet’s fleet consists mostly of Boeing 737-300 aircraft, which are not only technologically obsolete but also fuel inefficient.

Announcing the winding up on Friday, GOL stated that from now on the company will take care of all the air transport as well as associated services for the passengers of Webjet. The company will also be responsible for the flights booked for Webjet.

GOL also said that the move will have its impact on the costs of the company, particularly in the coming quarter, without affecting the following quarters significantly. The shut down is also expected to increase the operational efficiency of the company in the future.

As of date, Webjet had a fleet of 20 Boeing 737-300, out of which 16 are expected to be returned by the company in the first quarter of 2013, with the remaining to be returned in the first half of the same fiscal year.

Now, having to deal with a smaller fleet, the company anticipates reducing the Available Seat Kilometers (ASK) for its domestic supply by 5%-8% year-on-year in the first half of 2013, leading it to reduce costs and increase profitability.

We currently have a Neutral recommendation on GOL. The stock also bears a Zacks #3 (Hold) Rank. The company’s prime competitors Copa Holdings SA (CPA - Snapshot Report) currently has a Zacks #3 (Hold) Rank and LAN Airlines S.A (LFL - Snapshot Report) has a Zacks #4 (Sell) Rank.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%