GOL Feb Traffic Impresses - Analyst Blog
March 24 2014 - 4:00PM
Zacks
Leading Latin American airline,
GOL Linhas Aereas SA (GOL) posted solid traffic
results for Feb 2014. Net passenger revenue per available seat
kilometer (PRASK) for the month increased 27% year over year on
better load factor.
Revenue passenger kilometers or RPK
– implying revenue generated per kilometer per passenger – for the
month increased 20.2% from the year-ago month to 2,905.3 million.
Both domestic and international RPK showed an improvement of 19.5%
and 25.4%, respectively.
Available seat kilometers (ASK) –
that measures an airline's passenger carrying capacity –increased
0.3% year over year to 3,788.8 million. Home ground capacity
increased 0.2%, while on the international front, ASK improved
1.6%.
Domestic and international load
factor increased 12.6% and 13.5%, respectively, while consolidated
load factor increased 12.7% to 76.7%. A weak domestic market supply
as compared to a high demand led to the solid load factor. As a
result, the company’s yield also grew 6% from the prior-year
quarter, leading to the improved performance.
The biggest impediment to GOL’s
2014 growth is persistent weakness in Brazilian currency, which
contributed to the 8% increase in fuel prices thus offsetting some
of the positives of the quarter.
However, Brazil will host the 2014
football world cup and 2016 summer Olympics, two of the biggest
sporting extravaganzas. The country is expected to get around
600,000 international visitors in addition to 3 million domestic
fans this year, presenting a big opportunity for passenger carriers
like GOL.
To tap these opportunities, GOL
recently announced an exclusive strategic partnership with European
giant Air France-KLM SA, to expand its operations between Brazil
and Europe. We believe that this would significantly improve its
international performance.
GOL – which operates with other
industry players such as LATAM Airlines Group S.A.
(LFL) – has a Zacks Rank #3 (Hold). Better-ranked stocks within
this sector include Southwest Airlines Co. (LUV)
and American Airlines Group Inc. (AAL). Both carry
a Zacks Rank #1 (Strong Buy).
AMER AIRLINES (AAL): Free Stock Analysis Report
GOL LINHAS-ADR (GOL): Free Stock Analysis Report
LATAM AIRLINES (LFL): Free Stock Analysis Report
SOUTHWEST AIR (LUV): Free Stock Analysis Report
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