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Gol Linhas (GOL) April Traffic LacklusterAmid Coronavirus Woes

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With the COVID-19 pandemic ravaging air-travel demand, Gol Linhas Aereas Inteligentes’ (GOL - Free Report) consolidated traffic, measured in revenue passenger kilometers (RPK), tanked 93.6% on a year-over-year basis. Demand plunged both domestically (92.7%) as well as on the international front (99.5%), thanks to coronavirus-induced travel restrictions.

With Gol Linhas lowering capacity in response to dwindling demand, consolidated capacity (measured in available seat miles) contracted 93.5%. Due to the coronavirus-induced reduction in demand, this Zacks Rank #3 (Hold) Latin American carrier redesigned its network beginning Mar 28 to provide essential services from the São Paulo International Airport in Guarulhos. Moreover, consolidated load factor (% of seats filled by passengers) fell to 79.5% from 80.8% a year ago. Load factor declined as the fall in traffic was more than capacity contraction.

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The metric dropped 1.3 percentage points to 75.8% domestically and 22.4 percentage points to 56.3% internationally. Moreover, total departures decreased 93.9% and seats declined 94.5%. The lackadaisical 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 94.5% passengers less in April 2020 than the year-ago level indicates.

Due to tepid air-travel demand, shares of GOL Linhas have depreciated 18.2% in the past month compared with its industry’s 15.6% decline.

 

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