GOL Linhas Aereas Inteligentes S.A. posted a decline in air traffic for May 2016. Traffic – measured in revenue passenger kilometers (RPK) – stood at 2.80 billion, down 7.8% from 3.04 billion recorded a year ago.
Also, on a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) was down 6.6% to 3.74 billion mainly because of declines of 6.3% and 8.8% in domestic and international capacity, respectively. Likewise, both domestic and international RPK in the month deteriorated a respective 7.7% and 8.4%. Also, in May 2016, the carrier witnessed a 20.8% plunge in passenger count. Meanwhile, the load factor, or percentage of seats filled by passengers, was down to 74.9% from 75.8% recorded in May 2015.
At the end of the first five months of 2016, RPK was down 9.1% while ASK dropped 7.8%. Similarly, load factor for the same period fell 1.0 percentage points. Adverse conditions in the Brazilian economy, foreign currency headwinds owing to the strengthening of the U.S. dollar against the Brazilian real, lower passenger demand contributed to the declining in performance.
Apart the aforesaid negatives, the company’s near-term results are likely to be hurt by increasing competition from new entrants. Ryanair Holdings Plc. (RYAAY - Free Report) is on track to start operations in Argentina, which is considered to be a market with good potential and low competition as of now. This new entry would challenge Gol Linhas’ business in the region.
Zacks Rank & Stocks to Consider
GOL Linhas currently holds a Zacks Rank #2 (Buy). Other well-ranked stocks in the wider airlines sector include SkyWest Inc. (SKYW - Free Report) and Air France-KLM SA (AFLYY - Free Report) Both companies sport a Zacks Rank #1 (Strong Buy).
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GOL Linhas Aereas Inteligentes S.A. posted a decline in air traffic for May 2016. Traffic – measured in revenue passenger kilometers (RPK) – stood at 2.80 billion, down 7.8% from 3.04 billion recorded a year ago.
Also, on a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) was down 6.6% to 3.74 billion mainly because of declines of 6.3% and 8.8% in domestic and international capacity, respectively. Likewise, both domestic and international RPK in the month deteriorated a respective 7.7% and 8.4%. Also, in May 2016, the carrier witnessed a 20.8% plunge in passenger count. Meanwhile, the load factor, or percentage of seats filled by passengers, was down to 74.9% from 75.8% recorded in May 2015.
At the end of the first five months of 2016, RPK was down 9.1% while ASK dropped 7.8%. Similarly, load factor for the same period fell 1.0 percentage points. Adverse conditions in the Brazilian economy, foreign currency headwinds owing to the strengthening of the U.S. dollar against the Brazilian real, lower passenger demand contributed to the declining in performance.
Apart the aforesaid negatives, the company’s near-term results are likely to be hurt by increasing competition from new entrants. Ryanair Holdings Plc. (RYAAY - Free Report) is on track to start operations in Argentina, which is considered to be a market with good potential and low competition as of now. This new entry would challenge Gol Linhas’ business in the region.
Zacks Rank & Stocks to Consider
GOL Linhas currently holds a Zacks Rank #2 (Buy). Other well-ranked stocks in the wider airlines sector include SkyWest Inc. (SKYW - Free Report) and Air France-KLM SA (AFLYY - Free Report) Both companies sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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