ATW Daily News

Gol suffers heavy third-quarter loss on nonoperating charges

Tuesday November 18, 2008

Gol and Varig parent Gol Linhas Aereas Inteligentes suffered a BRL294.3 million ($131,1 million) loss in the third quarter, reversed from a BRL45.5 million profit in the year-ago period, as special charges eclipsed improvement on the operating level.

The company, which continues to integrate the LCC operation with Varig following their official merger into a single airline on the last day of the quarter (ATWOnline, Oct. 13), took a BRL261.8 million noncash foreign exchange loss and saw interest expenses nearly triple as debt increased.

Operationally, however, the three months went relatively well. Revenue climbed 37.2% year-over-year to BRL1.79 billion as seasonality, decreased promotional activities, previously planned capacity reductions and a smaller long-haul network helped boost yield. Expenses were up 35.7% to BRL1.73 billion and operating income nearly doubled to BRL61.2 million from BRL30.8 million in the third quarter of 2007.

Gol took delivery of four 737-700s and eight 737-800s and removed 10 737-300s and eight 767-300s from service during the quarter and plans to end 2008 with 104 aircraft in operation. It flew 5.94 billion RPKs, up 8.7%, against a 10.9% lift in ASKs to 9.91 billion. Load factor fell 1.2 points to 60%.

Yield was up 24.7% to BRL27.09 cents and operating RASK rose 23.7% to BRL18.04 cents. Unit cost increased 22.4% to BRL17.42 cents, or by 13.6% to BRL9.87 cents excluding fuel.

Gol said it would benefit from its network integration and continued fleet renewal during the fourth quarter and expects a 63% load factor and yield of approximately BRL27 cents. It said it "will continue to evaluate opportunities to expand operations by adding new flights in Brazil, as well as expanding to other high-traffic centers in South America."

by Brian Straus

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