Zacks_Analysts' Blog : GOL's Demand Growth for September - Analyst Blog

GOL Linhas Aéreas Inteligentes S.A. (GOL), recorded year over year demand growth of 4.4% on its total route network in September along with a load factor of 69.4%.

GOL’s domestic demand grew by 6.7% year over year based on the greater number of destinations within the company’s route network, partially offset by lesser number of holidays to support leisure traffic compared with the year-ago period. On the other hand, demand fell by 1.9% compared with the previous month mainly due to the higher number of operational days in August.

The company’s international route network fell by 16.3% year over year based on the return of three chartered B767 aircraft from their international flights, discontinuation of flights to Bogotá in Colombia and most importantly 2% currency depreciation against dollar. In contrast, driven by two new regular flights to Punta Cana in the Caribbean in September, the company’s international flight demand increased by 3.8% over the last month.

Moreover, the increased productivity of the company’s fleet, which was as high as approximately 13.5 daily block-hours in September 2011, increased the total supply by 9.4% year over year. In addition, the new Fortaleza/Rio Branco route, a new flight between Porto Alegre and Santiago as well as two new, regular flights to Punta Cana in the Caribbean also attributed to the increased daily block hour.

Conversely, supply fell by 2.0% over the last month mainly due to the difference in the number of operational days. The company reaffirmed its commitment for increasing its supply in 2012

GOL’s total load factor reached 69.4%, down 3.3 percentage point year over year and up 0.4 percentage point over the previous month. Net yield remained stable over the same period last year, while passenger revenue per available seat-kilometer (PRASK) fell by around 5.3% year over year. Over the last month, net yield moved marginally up by 2%.

During the third quarter of 2011, net yield was recorded between R$18.1 and R$18.7, down 7.7% year over year. PRASK fell by around 3.6% as well over the year-ago period. Yield improved slightly, while the load factor fell by 0.9 percentage point sequentially.

Moreover, in September, the company began to increase fares with cautious optimism. The improvement became apparent at the start of October, particularly on the main domestic routes.

Gol Linhas the largest low-cost and low-fare airline in Latin America, offering more than 940 daily flights to 63 destinations that connects all the important cities in Brazil and 13 major destinations in South America and Caribbean. The company competes directly with its peers, such as Copa Holdings SA (CPA), LAN Airlines S.A (LFL), and TAM S.A (TAM).