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Gol Linhas (GOL) Q4 Loss Wider Than Expected, Revenues Beat

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Gol Linhas Aereas Inteligentes (GOL - Free Report) incurred a loss (excluding $1.92 from non-recurring items) of 62 cents per share in the fourth quarter of 2021, wider than the Zacks Consensus Estimate of a loss of 41 cents. However, the amount of loss has narrowed year over year.

Net operating revenues of $523.7 million outperformed the consensus mark of $505.3 million. The top line surged significantly year over year, with passenger revenues (accounting for 96.1% of total revenues) rising 63.3%, thanks to continued recovery in air-travel demand in Brazil as vaccination rates increase. Cargo and other revenues declined 33.9%. Gol Linhas transported 6.5 million passengers in the fourth quarter, up 26.1% from the year-ago period. However, the same was down 32.1% from the fourth quarter of 2019, reflecting the softness in travel demand compared with the pre-coronavirus level.

Operational Statistics

Consolidated revenue passenger kilometers (RPK), the measure for revenues generated per kilometer per passenger, increased 16.6% from the fourth quarter of 2020 (down 32.7% from the fourth quarter of 2019). The carrier transported 39,000 passengers in the international market during the fourth quarter.

Consolidated available seat kilometers (ASK), measuring an airline's passenger-carrying capacity, also climbed 14.5% year over year (down 33.5% from the fourth quarter of 2019) with increase in domestic capacity.

Gol Linhas’ total load factor (percentage of seats filled with passengers) was 82.6% in the quarter, an improvement of 1.5 percentage points year over year due to traffic increasing more than capacity expansion. Net yield climbed 40% year over year.

Net passenger revenues per ASK ascended 42.6%, while net revenues per ASK jumped 34.9%. Average fuel price per liter increased 79.7%. Cost per ASK soared 84.7% year over year. Excluding fuel, the metric skyrocketed 94.8%. Meanwhile, total operating expenses (adjusted) surged 33.8% year over year, primarily due to a significant increase in fuel costs.

Gol Linhas, carrying a Zacks Rank #3 (Hold), exited the fourth quarter with total liquidity (cash and cash equivalents, cash investments, restricted cash, accounts receivable, and securities and receivables) of R$1.7 billion, down 17.8% sequentially. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

During the fourth quarter, operating activities generated cash of R$1.1 billion compared with R$657 million in the year-ago period. Long-term debt totaled R$19.97 billion at the end of the reported quarter, up 43.8% year over year.

Gol Linhas’ fleet, at the end of the reported quarter, comprised of 135 Boeing 737 aircraft (112 NGs and 23 MAXs). The average age of the fleet was 11.1 years.

2022 Outlook

Gol Linhas expects ASKs to increase in the range of 65-75% in 2022. The company expects to end the year with a fleet size of 130-140. Average load factor is estimated to be approximately 82%. Total net revenues are predicted to be around R$13.7 billion in 2022. Fuel price per liter is forecast to be R$4.3. EBITDA margin is expected to be around 24%, while EBIT margin is estimated to be approximately 10%. Pre-tax margin and effective income tax rate are expected to be 0% for the full year.

Gol Linhas expects net capital expenditures to be approximately R$700 million in 2022. For the full year, the company expects earnings to beak-even.

Performance of Other Airline Stocks

Ryanair Holdings (RYAAY - Free Report) , carrying a Zacks Rank #3, incurred a loss of 48 cents per share in the third quarter of fiscal 2022 (ended Dec 31, 2021), wider than the Zacks Consensus Estimate by a penny. However, the amount of loss narrowed by 70.4% year over year. Results were hurt by Omicron-induced travel restrictions in December, which weakened close-in bookings and fares for the Christmas and New Year travel period.

Ryanair’s quarterly revenues of $1,681.1 million fell short of the Zacks Consensus Estimate of $1,792.2 million but improved more than 400% from the year-ago period with significant improvement in traffic owing to strong bookings in October and November.

Copa Holdings (CPA - Free Report) , carrying a Zacks Rank #3, reported fourth-quarter 2021 earnings (excluding 71 cents from non-recurring items) of $1.98 per share, which beat the Zacks Consensus Estimate of $1.15 per share. In the year-ago quarter, the company had incurred a loss of $2 per share due to coronavirus-led depressed air-travel demand.

Copa Holdings’ quarterly revenues of $575 million also outperformed the Zacks Consensus Estimate of $546.2 million and rose significantly year over year, thanks to an improvement in air travel.

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