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Increased December Traffic for GOL

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GOL Linhas Aéreas Inteligentes S.A. (GOL - Free Report) , a low-cost airline based in Latin America, reported increased air traffic for the month of December 2012. Per GOL’s recent strategy of reducing its domestic market supply, the company closed down its Webjet operations in late November last year. The effects of the shut down were reflected in the total domestic supply for December 2012, reducing to the extent of 21%.

Driven by the holiday season across the American continent, GOL witnessed rising international traffic. Therefore, in order to meet up with this trend, the company increased its services to various destinations. Moreover, the company also expanded its operations to Santo Domingo and Miami to take full advantage of the growing international demand.

For the reported month, the passenger revenue per available seat kilometer (PRASK) increased by 14% due to the steps taken by the company to restructure its domestic demand. For the fourth quarter 2012, PRASK increased by 11% compared to the prior year quarter. Also, the fuel prices for the month increased roughly 25% year over year, with the fourth quarter prices increasing around 20% year over year.

Recently, another airline LATAM Airlines Group S.A. reported its traffic updates for the same period. The domestic passenger traffic increased 10.5% for the month compared to the year-ago month. Also, last month, the company achieved an increase in the load factor of about 1.8 percentage points against a 4.9 percentage points for GOL over the same period last year.

However, Southwest Airlines Co. (LUV - Free Report) , a Texas based airline, reported a fall in the traffic and capacity for December 2012. Also, at the beginning of January 2013, Delta Air Lines Inc. (DAL - Free Report) reported a modest increase in traffic for the same month.

GOL is expected to report its fourth quarter and fiscal 2012 results on March 25, 2013 after the market closes. The stock currently holds a Zacks Rank #3 (Hold).

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