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Gol Linhas (GOL) March Traffic Dull Due to Coronavirus Woes

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With the coronavirus pandemic ravaging air-travel demand, Gol Linhas Aereas Inteligentes S.A.’s (GOL - Free Report) consolidated traffic, measured in revenue passenger kilometers (RPK), declined 29.7% to 2.2 billion. Demand decreased both domestically (27.4%) as well as on the international front (42.9%), thanks to coronavirus-induced travel restrictions.

With Gol Linhas cutting capacity in response to dwindling demand, consolidated capacity (measured in available seat miles) contracted 22.2% to 3.08 billion. Notably, all international flights have been cancelled for the Mar 28-May 3 period. Additionally, the airline slashed its domestic capacity by 92% for the same period.

Coming back to the March traffic report, occupancy rate fell to 71.6% from 79.3% in March 2019 as the traffic descent was more than the capacity contraction. The metric dropped7 percentage points to 72.8% domestically and 12.5 percentage points to 63.8% internationally. Notably, the weakness in occupancy rate was mainly due to the waning air-travel demand in the latter half of the month.  Notably, occupancy rate was a healthy 82% (domestically) in the Mar 1-Mar 13 period.

The extremely bleak air-travel demand scenario can be gauged from the fact that Gol Linhas, which competes with the likes of Copa Holdings (CPA - Free Report) , LATAM Airlines (LTM - Free Report) and Azul (AZUL - Free Report) in the Latin American aviation space, carried 33.5% less passengers last month than a year ago.

Due to dismal air-travel demand, shares of GOL Linhas have tanked 49% in the past month compared with its industry’s 37.6% decline.

Additionally, Gol Linhas carries a Zack Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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