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Gol Linhas (GOL) January Traffic Plunges, Load Factor Tanks

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Thanks to coronavirus-induced dwindling air-travel demand, Gol Linhas Aereas Inteligentes’ (GOL - Free Report) traffic, measured in revenue passenger kilometers, plunged 37.2% year over year in January.

With travel demand falling below the year-ago levels, the company reduced capacity significantly. In January, capacity measured in available seat kilometers contracted 36.6%. However, with traffic declining more than the amount of capacity contraction, load factor (% of seats filled by passengers) tanked 70 basis points year over year to 83.2%. Gol Linhas’ total monthly departures slumped 41.4% and seats tanked 40.6%.

Due to coronavirus-related woes, shares of Gol Linhas have plunged 41.5% in the past year compared with the industry’s 22.2% decline.

However, gradual improvement is evident from increased demand for flights operated by Gol Linhas. Demand in the domestic market increased 8% in January from December levels. Moreover, supply expanded 5% in January on a month-over-month basis. The Latin America-based airline did not operate international flights during the month of January.

Gol Linhas operated 489 flights per day on average in January compared with 476 in December. The airline added 332 frequencies at São Paulo, Distrito Federal, Rio de Janeiro, Ceará and Bahia airports.

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 Kansas City Southern (KSU - Free Report) , FedEx Corporation (FDX - Free Report) and Herc Holdings Inc. (HRI - Free Report) . Kansas City carries a Zacks Rank #2 (Buy), while FedEx 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 Kansas City, FedEx and Herc Holdings is pegged at 15%, 12% and 12.6%, respectively.

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