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Gol Linhas' (GOL) March Traffic Drops 47.7% Amid Coronavirus Woes

With Brazil reeling under a second wave of the deadly coronavirus pandemic, it was only natural that Gol Linhas Aereas Inteligentes GOL posted lacklustre traffic numbers for the month of March.

Notably, traffic, measured in revenue passenger kilometers, plunged 47.7% year over year in the month. With travel demand falling below the year-ago levels, the company reduced capacity significantly. In the same time frame, capacity measured in available seat kilometers contracted 47.8%. Since traffic decline was marginally less than capacity contraction, load factor (% of seats filled by passengers) inched up 0.2 percentage points on a year-over-year basis to 71.8%. Gol Linhas’ total monthly departures slumped 52% while seats tanked 50.7%.

Due to the recent spike in COVID-19 cases, demand in the domestic market declined 32% during March from the February levels. Moreover, supply contracted 23% in the same month on a month-over-month basis due to the reduction in demand for tickets coupled with increased cancellations and no-shows. The airline, which competes with the likes of Copa Holdings CPA and Azul AZUL in the Latin-American aviation space, did not operate regular international flights in February.

The adverse impact of the fresh wave of COVID-19 is again reflected in Gol Linhas having operated just 245 domestic flights per day (on average) in March. The airline adjusted frequencies to compensate for lower demand in its hubs at São Paulo, Distrito Federal, Rio de Janeiro, Ceará and Bahia. Notably, Gol Linhas operated 355 flights a day, on average, in February compared with 489 in January.

Zacks Rank & Key Pick

Gol Linhas presently carries a Zacks Rank #4 (Sell).

A better-ranked stock in the Zacks Transportation  sector is Knight-Swift Transportation Holdings KNX, currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Knight-Swift have gained more than 18% so far this year

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Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report
KnightSwift Transportation Holdings Inc. (KNX): Get Free Report
Copa Holdings, S.A. (CPA): Free Stock Analysis Report
AZUL SA (AZUL): Free Stock Analysis Report
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