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GOL Linhas (GOL) January Traffic Increases, Load Factor Flat

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GOL Linhas Aéreas Inteligentes reported modest traffic figures for January 2019. Meanwhile, load factor (percentage of seats filled by passengers) was flat year over year as traffic growth roughly matched capacity expansion in the month.

Consolidated traffic, measured in revenue passenger kilometers (RPK), increased 5.6% to 4.32 billion. Domestic RPK expanded 3.9% and international RPK rallied 18.1%. On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) expanded 5.7% to 5.17 billion. Domestic ASK and international ASK grew 3.3% and 22.1%, respectively.

On a consolidated basis, the Latin-American carrier posted a 4.9% rise in passenger count. Consolidated load factor in January came in at 83.5%. However, departures in the month declined 1%.

More than the traffic report, we expect investor focus to remain on the company’s fourth-quarter 2018 results, scheduled for Feb 28. Solid demand for air travel is expected to boost passenger revenues, which in turn should fuel top-line growth.

On the flip side, escalating operating expenses might limit bottom-line growth in the soon to-be-reported quarter. Apart from high costs, depreciation of Brazilian Real against U.S. dollar is also likely to weigh on the fourth-quarter results.

Zacks Rank & Key Picks

GOL Linhas carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are Azul S.A. (AZUL - Free Report) , Canadian Pacific Railway Limited (CP - Free Report) and Union Pacific Corporation (UNP - Free Report) . While Azul sports a Zacks Rank #1 (Strong Buy), Canadian Pacific and Union Pacific carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Azul, Canadian Pacific and Union Pacific have rallied more than 10%, 16% and 28%, respectively, in a year.

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