SÃO PAULO, Nov. 18, 2020
/PRNewswire/ -- GOL Linhas Aéreas Inteligentes
S.A. (NYSE: GOL and B3: GOLL4), ("GOL" or "Company"),
Brazil's largest airline, today
provides its Investor Update for the month of October of
2020. All information is presented in Brazilian Reais (R$). The
information below is preliminary and unaudited.
Since the last monthly update on October
9, 2020, GOL increased its capacity to an average of 363
flights per day, a 34% increase from an average of 270 daily
flights in September. On peak days, the Company operated 500 daily
flights in October to service the 34% month-over-month uptick in
demand for air travel. GOL's consolidated gross sales for the month
were R$827 million and the average
load factor was 78%, in line with previous months.
"After the big bump in sales during Brazil's winter season, we sustained that
growth with a steady increase in October," said Paulo Kakinoff,
CEO. "We expect sales to grow again this month ahead of a busy
Summer season and anticipate that we will end the year operating
all destinations served pre-pandemic. However, any addition of
capacity to our network must meet clear criteria of profitability
to guarantee the sustainable resumption of operations."
The Company ended October 2020
with a total fleet of 128 B737s. With 87 aircraft operating in
its network, the planned re-opening of three bases and an increase
in flights between São Paulo and Rio de
Janeiro, daily flight operations increased 34% over
September 2020 and were equivalent to
52% of the same period last year. During the month, GOL ramped up
to a peak of 500 daily flights, increasing frequencies in its hubs
in São Paulo, Rio de Janeiro, Fortaleza, Salvador and Brasília. The current network
represents even higher levels of connectivity compared to the
beginning of the year, with more destinations and faster
connections. As a result, GOL is well-positioned in both major and
regional markets.
The Company's cash flow equilibrium has been a driving force of
GOL's efforts during the pandemic. Despite the structural and
financial inefficiencies created by having its two operating
subsidiaries as separate companies, GOL Management believes the key
competitive advantages built over the years ensure GOL's financial
strength. The Company's cost-efficient structure, support from
stakeholders and partners, flexible fleet and network model, and
the ongoing and significant return of Customer travel in the
domestic market, firmly places GOL in a leadership role in the
Brazilian airline industry.
"With no significant debt maturities until 2024, we can use our
capacity discipline to expand profitability as operations continue
to resume," added Kakinoff.
Delivering Cash Equilibrium as Planned
October 2020 observed a 38% growth in the search for
GOL airline tickets, compared to the average search numbers in
3Q20. On specific dates this metric was higher than the same day in
2019, an important sign of returning consumer confidence. Because
of this greater interest, the Company recorded a 25% increase in
sales across all channels when compared to the average sales
reported in 3Q20. With the addition of flights during the month,
the revenue from passengers transported increased 21% over
September, with better yield efficiency than competitors through
GOL's rational capacity management.
During the month, GOL had a net cash consumption ("burn") of
R$1 million/day, excluding include
amortizations of bank debt and interest paid on bonds, which is an
improvement in the net cash consumption of R$3 million/day that GOL had forecast for this
period.
For the remainder of 2020 (November-December), assuming expected
revenues and same items described above, the Company maintains a
conservative estimate for a net cash consumption ("burn") of
approximately R$3 million/day. Prior
to payment of lease and financial expenses, net cash generation
("earn") is estimated at approximately R$1
million/day.
Preserving the Company's Balance Sheet Liquidity
The Company ended the month with approximately R$2.2 billion in total liquidity. Including the
financeable amounts of deposits and unencumbered assets, GOL's
potential liquidity sources total approximately R$6 billion. The average maturity of the
Company's long-term debt, excluding aircraft leases and perpetual
notes, is nearly three years.
"We have addressed all the relevant financial obligations
provided for in our cash flow, and we have a solid partnership with
the main providers of working capital. The financial management
since the beginning of this pandemic reflects GOL's commitment to
its investors. Our focus continues to be on having a sound capital
structure and strengthening the balance sheet through the recovery
period," stated Richard Lark,
CFO.
Increasing GOL's Flight Capacity to Meet Demand
Through the end of October 2020,
GOL reduced its fleet by 11 Boeing 737 leased aircraft and plans to
return other three aircraft by year-end. Aircraft returns were part
of the last year's fleet plan and did not require contractual
alterations, as the Company's plan had already incorporated the
flexibility to adjust to the volatility of the air travel
business.
GOL has also retained even more asset flexibility, as its
existing contracts allow it to reduce its fleet by up to another 30
aircraft in 2021-2022 if needed, which can be further reduced if
demand trends lower. Additionally, the Company reduced its
2020-2022 Boeing 737 MAX deliveries by 34 aircraft.
These cancellations represent a definitive reduction in capital
expenditures for aircraft acquisition advances (PDPs) and address
the Company's capacity planning for the coming years, with plans to
fully finance all aircraft expenditures and engine overhauls
remaining in 2020.
The Company's fleet operating model will continue to provide
significant competitive advantages. GOL does not have widebody
aircraft or aircraft financed in capital markets structures, EETCs
or finance leases. Its fleet consists of 100% operating leases and
narrow-body aircraft that can operate in all domestic, regional and
international markets.
GOL's aircraft contracts are adjusted to the expected recovery
of demand through the remainder of 2020 and in 2021 and also will
provide an effective reduction in the Company's unit operating
costs. Additionally, GOL has reduced its fixed costs by converting
a portion of its monthly lease payments to variable
power-by-the-hour.
Maintaining a Conservative Cash Forecast
Matching capacity to demand has always been a competitive
advantage in the Company's fleet management. October 2020
showed continued demand recovery over September 2020 and provided better visibility
into the last quarter of the year. GOL maintains significant
flexibility to respond to the prevailing demand trends.
In November, GOL increased its capacity to approximately 372
flights per day, and 450 daily flights on peak days, placing the
Company's operations at around 50% of the flight schedule in
November 2019. During this current
month, GOL will be operating 94 aircraft in its network.
Commented Kakinoff: "Our single-type fleet operating model and
dominant position in Brazil's
high-density traffic hubs enables us to quickly add routes to meet
demand, while maintaining discipline on capacity and
profitability."
For 4Q20, GOL expects to maintain personnel costs reduced at up
to 40% of pre-pandemic levels.
On these conservative assumptions, and with the increase in
operational volumes and sales, GOL has improved its operating cash
flow equilibrium. The Company estimates that it has sufficient
liquidity to finance its working capital, expenses and debt
service during this growth phase. Based on GOL's current
liquidity levels and having converted a significant portion of
fixed payroll and fleet costs into variable costs, the Company will
maintain its market unit cost leadership.
The Boeing 737 MAX is nearing approval to begin operating, and
its return to service will increase our cost savings, as the MAX-8s
consume 15% less fuel than the 737-800 NG aircraft. Resuming high
aircraft utilization and expanding its network predominantly
concentrated in Brazil will enable
GOL to continue to operate with the lowest and most variable cost
structure among its peers. In the best-case scenario, the Company
estimates that the MAX will return to operation in its fleet by the
end of 2020.
This competitive advantage is further evidenced by the actions
of GOL's stakeholders who have supported the Company during this
global crisis. GOL Management fully honored its commitments with
the global capital markets and the Company is the only airline in
Latin America to have returned
capital to investors in 2020. GOL expects these actions will
continue to define the Company, and it counts on the continued
support and trust of GOL's stakeholders and partners investing in
the recovery of the Brazilian market.
Building Trust with the Resumption of Travel
During the months of January to October, the Company obtained
the top rating on the Consumidor.gov.br portal, leading in the
Solution Index, the Satisfaction Index and the Average Response
Time.
Kakinoff commented: "Through our values of Service and Safety,
our Customers are increasingly confident in flying. We are working
on every front, including ticket sales, customer service, boarding,
the in-flight experience and disembarkation services, to ensure
that our travelers are comfortable with the entire flight
experience. We believe Customers will want to fly with the airline
they trust most on Service and Safety, both during and after the
pandemic".
In response to the pandemic, GOL reinforced all of its
procedures to ensure the Health and Safety of its Customers and
Employees, with increased attention to the cleaning of aircraft,
including the use of a hospital-grade disinfectant for the service
galleries and all areas of intense use in the cabin and the
cockpit.
GOL's aircraft have HEPA air filters, which eliminates 99.9% of
particles such as bacteria, viruses and other impurities on board,
allowing the circulation of purer air. In addition, each set of 3
to 7 seats rows has its own air circulation system, making minimal
air circulation among passengers.
GOL also equipped its Employees with gloves and masks, in
addition to making alcohol-based gel available to the crew and
Customers on the aircraft. The use of masks on board, mandatory as
of May 10, was well-accepted by
Customers compared to the response in other countries.
Communication has been a priority in GOL's operations. Airport
Employees and Crew members are fully prepared advising Customers on
social distancing measures and on-board health and safety
practices. In addition, the Company has observed exemplary behavior
of travelers in relation to their concern for their own safety and
that of everyone around them.
As a result of these actions taken by the Company, its Employees
and its Customers, on average, active GOL Employees have tested
positively for COVID-19 only once in every 1,701 flights, an
astonishingly low rate, of which the Company is proud.
Key Metrics –
October 2020 (preliminary and unaudited)
|
Liquidity
|
October/2020
|
∆
September/2020
|
Total
liquidity
Deposits
Unencumbered
assets
|
R$2.2
billion
R$2.3
billion
R$1.3
billion
|
-1%
+1%
-
|
Net Operating Cash
Consumption¹
|
October/2020
|
∆
September/2020
|
Cash
outflows
Cash
inflows
Net cash consumption
("burn")
|
R$(25)
MM/day
R$24
MM/day
R$(1)
MM/day
|
+17%
+28%
NM
|
Fleet
|
October/2020
|
∆
September/2020
|
Total
(average)
Grounded aircraft
(average)
Operating aircraft
(average)
Flights per day
(average)
Network
destinations
|
128
41
87
363 (52% of
2019)
63 (23% of
2019)
|
-1
-17
+16
+34%
+5%
|
Operating
Results
|
October/2020
|
∆
September/2020
|
Seats
(000)
ASK
(million)
Load
factor
Consolidated gross
sales (R$MM)
Consolidated gross
revenue (R$MM)
|
1,998
2,317
78.0%
827
603
|
+38%
+37%
-2.0 p.p.
+3%
+23%
|
1- Excluding debt
service.
|
Investor Relations
ri@voegol.com.br
www.voegol.com.br/ir
+55(11) 2128-4700
Media Relations
Becky
Nye, Montieth & Company
bnye@montiethco.com
About GOL Linhas Aéreas Inteligentes
S.A.
GOL serves more than 36 million passengers
annually. With Brazil's largest
network, GOL offers customers more than 750 daily
flights to over 100 destinations in Brazil and in South
America, the Caribbean and
the United States. GOLLOG's
cargo transportation and logistics business serves more than 3,400
Brazilian municipalities and more than 200 international
destinations in 95 countries. SMILES allows over 16
million registered clients to accumulate miles and redeem tickets
to more than 700 destinations worldwide on the GOL partner network.
Headquartered in São Paulo, GOL has a team of approximately 15,000
highly skilled aviation professionals and operates a fleet of 128
Boeing 737 aircraft, delivering Brazil's top on-time performance and an
industry leading 19-year safety record. GOL has invested billions
of Reais in facilities, products and services and technology to
enhance the customer experience in the air and on the ground. GOL's
shares are traded on the NYSE (GOL) and the B3 (GOLL4). For further
information, visit www.voegol.com.br/ir.
Disclaimer
The information contained in this press
release has not been subject to any independent audit or review and
contains "forward-looking" statements, estimates and projections
that relate to future events, which are, by their nature, subject
to significant risks and uncertainties. All statements other than
statements of historical fact contained in this press release
including, without limitation, those regarding GOL's future
financial position and results of operations, strategy, plans,
objectives, goals and targets, future developments in the markets
in which GOL operates or is seeking to operate, and any statements
preceded by, followed by or that include the words "believe",
"expect", "aim", "intend", "will", "may", "project", "estimate",
"anticipate", "predict", "seek", "should" or similar words or
expressions, are forward-looking statements. The future events
referred to in these forward-looking statements involve known and
unknown risks, uncertainties, contingencies and other factors, many
of which are beyond GOL's control, that may cause actual results,
performance or events to differ materially from those expressed or
implied in these statements. These forward-looking statements are
based on numerous assumptions regarding GOL's present and future
business strategies and the environment in which GOL will operate
in the future and are not a guarantee of future performance. Such
forward-looking statements speak only as at the date on which they
are made. None of GOL or any of its affiliates, officers,
directors, employees and agents undertakes any duty or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except to
the extent required by law. None of GOL or any of its affiliates,
officers, directors, employees, professional advisors and agents
make any representation, warranty or prediction that the results
anticipated by such forward-looking statements will be achieved,
and such forward-looking statements represent, in each case, only
one of many possible scenarios and should not be viewed as the most
likely or standard scenario. Although GOL believes that the
estimates and projections in these forward-looking statements are
reasonable, they may prove materially incorrect and actual results
may materially differ. As a result, you should not rely on these
forward-looking statements.
Non-GAAP Measures
To be consistent with industry
practice, GOL discloses so-called non-GAAP financial measures which
are not recognized under IFRS or U.S. GAAP, including "Net Debt",
"Adjusted Net Debt", "total liquidity" and "EBITDA". The Company's
management believes that disclosure of non-GAAP measures provides
useful information to investors, financial analysts and the public
in their review of its operating performance and their comparison
of its operating performance to the operating performance of other
companies in the same industry and other industries. However, these
non-GAAP items do not have standardized meanings and may not be
directly comparable to similarly-titled items adopted by other
companies. Potential investors should not rely on information not
recognized under IFRS as a substitute for the GAAP measures of
earnings or liquidity in making an investment decision.
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SOURCE GOL Linhas Aéreas Inteligentes S.A.