Gol Linhas Aereas Inteligentes S.A. (GOL - Free Report) reported unimpressive traffic figures for August. Traffic, measured in revenue passenger kilometers (RPK), inched up a mere 0.1% to 2.99 billion. While domestic RPK climbed 1.8%, international RPK dropped 13.2%.
On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) expanded 1.7% to 3.89 billion. Domestic ASK improved2.7% while international ASK declined 6%. The carrier witnessed a 3.2% rise in passenger count. Load factor (percentage of seats filled by passengers) fell to 76.9% from 78.2% in the year-ago period as capacity expansion outpaced traffic growth.
At the end of the first eight months of the year, Gol Linhas generated RPK of 25.22 billion (up 3.6%) and ASK of 31.76 billion (up 3.3%). Consequently, load factor increased 20 basis points to 79.4% in the period.
Even though passenger traffic is anticipated to rise going forward on the back of solid demand for air travel, escalating fuel prices are a cause for concern. With fuel accounting for the major share of airline expense, a hike in its price pushes up costs and affects bottom-line growth in the process. Not surprisingly, the uptrending fuel prices have caused the company to raise fuel price per liter view for 2018 to R$2.9 compared with R$2.5, expected earlier. Consequently, the company now expects a loss per share of R$1-R$1.20 in the year. Previously, it anticipated earnings in the range of R$0.90-R$1.10.
Zacks Rank & Key Picks
Gol Linhas carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are SkyWest, Inc (SKYW - Free Report) , C.H. Robinson Worldwide, Inc. (CHRW - Free Report) and Trinity Industries, Inc. (TRN - Free Report) . While C.H. Robinson holds a Zacks Rank #2 (Buy), SkyWest and Trinity sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of SkyWest, C.H. Robinson and Trinity have rallied more than 62%, 32% and 20%, respectively, in a year.
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