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Gol Linhas (GOL) Expects Q2 Demand & Capacity to Surge Y/Y

Gol Linhas Aereas Inteligentes S.A. GOL provided its expectations for the second quarter of 2021.

Amid coronavirus-led disruptions in the aviation industry, the airline estimates approximately 126 domestic routes to have been served in the second quarter, which is about 87% of the 2019 level. Average operating fleet is estimated to be around 50% of the pre-pandemic level.

The carrier anticipates net operating revenues to be approximately R$1 billion in the second quarter, which represents 31% of the revenues in the same period in 2019. Load factor (percentage of seats filled with passengers) in the period is forecast to be 85.1%. While EBITDA margin is estimated to be between 16-18%, EBIT margin is predicted to be in the range of 8-10%. The company anticipates average fuel price per liter to be R$3.38 - R$3.44 in the second quarter. Its net cash burn is expected to be neutral in the quarter.


Gol Linhas expects passenger revenues per available seat kilometers (PRASK) to decline approximately 17% in the second quarter from the year-ago level as air-travel demand remains suppressed in Brazil amid a third wave of coronavirus. Operating cost per available seat mile, excluding fuel, is estimated to be down around 55% from the second quarter of 2020.

Domestic demand, measured in revenue passenger kilometers (RPK) is estimated to surge more than 300% in the second quarter from the year-ago level, highlighting the improvement in travel demand from the lows in 2020. Domestic capacity, measured in available seat kilometers (ASK), is also expected to rise more than 300%. The company estimates total demand, capacity and the number of seats to increase more than 300% as well in the to-be-reported quarter. Detailed result will be available on Jul 29.

Zacks Rank & Key Picks

Gol Linhas carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are C.H. Robinson Worldwide CHRW, Expeditors International of Washington EXPD and ArcBest Corporation ARCB. While ArcBest sports a Zacks Rank #1 (Strong Buy), C.H. Robinson and Expeditors carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of C.H. Robinson, Expeditors and ArcBest have rallied more than 10%, 64% and 100% in a year’s time, respectively.


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