We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Gol Linhas (GOL) January Sales Drop Due to Spike in Coronavirus
Read MoreHide Full Article
Gol Linhas Aereas Inteligentes S.A. is witnessing a deceleration in travel demand due to rising coronavirus cases in Brazil. The airline, which had been seeing consistent recovery in domestic traffic ever since economies reopened, saw an 18% reduction in January sales (compared to December 2020) due to dampened travel demand, thanks to a second wave of Covid-19 cases in Brazil and seasonal softness in demand.
Nevertheless, Gol Linhas increased its January capacity by 3% to an average of 489 flights per day compared with the December 2020 levels. In fact, the company operated approximately 628 daily flights on peak days. However, the airline’s consolidated gross revenues for January decreased sequentially by 12% to R$ 810 million. Average load factor (percentage of seats filled by passengers) increased 2.2 percentage points to 83.2% last month compared with December. Passenger revenue per available seat kilometers (PRASK) inched up 2.4% sequentially in January, but declined 12.5% year over year.
During January, Gol Linhas increased frequencies in its Sao Paulo, Rio de Janeiro, Brasilia, Fortaleza and Salvador hubs. The company is currently operating on 100% of its domestic network. The carrier’s net cash burn from operations was R$1 million per day in January. Due to rising demand trends, the company had managed to generate cash in November and December last year. For the first quarter of 2021, the carrier estimates net cash consumption of R$ 2 million per day, considering the recent spike in COVID-19 cases. In response to the low travel demand, Gol Linhas is reducing fixed costs and cutting back operations to align its network in accordance with current demand trends.
This month, the carrier will operate approximately 371 flights per day (around 51% of February 2020 level). The reduction in the company’s domestic flight schedule is due to weaker demand in Brazil as a result of the coronavirus case spike and the beginning of low season.
On a positive note, Gol Linhas received the delivery of its first Boeing 737 MAX-8 aircraft in January following the latter’s ungrounding in November after 20 long months. The carrier believes the 737 MAX should help in its expansion plans, as it increases productivity by 24%, reduces fuel consumption by approximately 15% and enables the aircraft to have a range of around 1,000 kilometers more, compared with the current 737 NG aircraft it operates.
The airline, which is yet to see substantial improvement in corporate travel demand, believes that the successful roll out of coronavirus vaccines will facilitate recovery in the same.
Gol Linhas had approximately R$ 2.2 billion in total liquidity at the end of January 2021.
Shares of ArcBest, Saia and Herc Holdings have rallied more than 57%, 54% and 73% in the past six months, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Gol Linhas (GOL) January Sales Drop Due to Spike in Coronavirus
Gol Linhas Aereas Inteligentes S.A. is witnessing a deceleration in travel demand due to rising coronavirus cases in Brazil. The airline, which had been seeing consistent recovery in domestic traffic ever since economies reopened, saw an 18% reduction in January sales (compared to December 2020) due to dampened travel demand, thanks to a second wave of Covid-19 cases in Brazil and seasonal softness in demand.
Nevertheless, Gol Linhas increased its January capacity by 3% to an average of 489 flights per day compared with the December 2020 levels. In fact, the company operated approximately 628 daily flights on peak days. However, the airline’s consolidated gross revenues for January decreased sequentially by 12% to R$ 810 million. Average load factor (percentage of seats filled by passengers) increased 2.2 percentage points to 83.2% last month compared with December. Passenger revenue per available seat kilometers (PRASK) inched up 2.4% sequentially in January, but declined 12.5% year over year.
During January, Gol Linhas increased frequencies in its Sao Paulo, Rio de Janeiro, Brasilia, Fortaleza and Salvador hubs. The company is currently operating on 100% of its domestic network. The carrier’s net cash burn from operations was R$1 million per day in January. Due to rising demand trends, the company had managed to generate cash in November and December last year. For the first quarter of 2021, the carrier estimates net cash consumption of R$ 2 million per day, considering the recent spike in COVID-19 cases. In response to the low travel demand, Gol Linhas is reducing fixed costs and cutting back operations to align its network in accordance with current demand trends.
Gol Linhas Aereas Inteligentes S.A. Price
Gol Linhas Aereas Inteligentes S.A. price | Gol Linhas Aereas Inteligentes S.A. Quote
This month, the carrier will operate approximately 371 flights per day (around 51% of February 2020 level). The reduction in the company’s domestic flight schedule is due to weaker demand in Brazil as a result of the coronavirus case spike and the beginning of low season.
On a positive note, Gol Linhas received the delivery of its first Boeing 737 MAX-8 aircraft in January following the latter’s ungrounding in November after 20 long months. The carrier believes the 737 MAX should help in its expansion plans, as it increases productivity by 24%, reduces fuel consumption by approximately 15% and enables the aircraft to have a range of around 1,000 kilometers more, compared with the current 737 NG aircraft it operates.
The airline, which is yet to see substantial improvement in corporate travel demand, believes that the successful roll out of coronavirus vaccines will facilitate recovery in the same.
Gol Linhas had approximately R$ 2.2 billion in total liquidity at the end of January 2021.
Zacks Rank & Key Picks
Gol Linhas carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Transportation sector are ArcBest Corp. (ARCB - Free Report) , Saia, Inc. (SAIA - Free Report) and Herc Holdings Inc. (HRI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of ArcBest, Saia and Herc Holdings have rallied more than 57%, 54% and 73% in the past six months, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>