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Gol Linhas (GOL) Gross Sales Rise, Revenues Dip for November

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Gol Linhas Aereas Inteligentes reported an investor update for November. Since the last monthly update on Nov 18, the company stated that it expanded its capacity to an average of 369 flights a day during last month, up 2% from October levels. The company saw 5% improvement in demand in the period from the October reading. The uptick in air-travel demand resulted in the carrier operating 450 flights daily in November on peak days.

The Latin America-based airline’s gross sales in November was R$886 million, up 6% month over month. Average load factor (% of seats filled with passengers) was 84.5% in the month, up 6.5 percentage points from October levels. In November, there was a 20% month-over-month increase in sales across all channels. However, gross revenues dropped 7% to R$559 million in November from October levels.

In November, Gol Linhas’ total fleet size was 127 planes, of which 32 were grounded. Total liquidity at the end of the month was R$2.3 billion. During the month, Gol Linhas increased its frequencies at certain hubs including Congonhas, Santos Dumont and Salvador. The carrier reduced its 2020-2022 Boeing 737 MAX deliveries by 34 aircrafts. It has an order book consisting of 95 aircrafts, scheduled for delivery in 2022-2032.

During November, the carrier generated net cash of R$3 million/day (including full payment of debt service and financial expenses) compared with net cash burn of R$3 million/day that company had projected for this period. For December, the airline company anticipates a net cash generation of R$3 million/day. For the first quarter of 2021, Gol Linhas expects its net cash consumption to be at R$2 million/day.

Anticipating the increase in travel demand to continue, Gol Linhas further boosted its December capacity to operate nearly 480 flights a day and 600 flights daily on peak days. The carrier expects to bring its December 2020 operations at around 80% of its flight schedule achieved in December 2019. For the December-end quarter, the Latin American airline anticipates to maintain its personnel costs at a reduced rate of 40% from its pre-COVID levels.

Zacks Rank & Stocks to Consider

Gol Linhas currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. (KNX - Free Report) , Landstar System, Inc. (LSTR - Free Report) and Herc Holdings Inc. (HRI - Free Report) . Landstar carries a Zacks Rank #2 (Buy), while Knight-Swift and Herc Holdings sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, Landstar and Herc Holdings is pegged at 15%, 12% and 12.6%, respectively.

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