Yahoo Finance GOL Linhas (GOL) Reports Robust November Traffic Figures
Shares of GOL Linhas Aereas Inteligentes S.A. GOL have performed exceedingly well so far this year, gaining in excess of 100% and significantly outperformed the Zacks Airline industry’s rally of 11.8%.
Ushering in further good news, the carrier recently unveiled an impressive November traffic report. Traffic, measured in revenue passenger kilometers (RPK), increased 7.1% to 3.12 billion in the month.
On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) rose 2.8% to 3.81 billion, primarily because of the expansion of 2% and 9.8% in domestic and international capacity, respectively. Domestic and international RPK in November also improved 7.2% and 6.3%, respectively. The carrier further witnessed a 6.3% increase in passenger count in the same period.
Load factor — percentage of seats filled by passengers — rose to 81% from 77.8% a year-ago, owing to traffic expansion exceeding capacity growth.
At the end of the first 11 months of 2017, RPK increased 3.1% while ASK inched up 0.3%. Moreover, load factor for the period improved 220 basis points to 79.6%. However, the company recorded a 4.6% reduction in the number of seats on a year-to-date basis while volume of departures fell 4.9%.
2018 Outlook
Gol Linhas, which competes with the likes of Copa Holdings CPA in the Latin American space, issued a bullish outlook for 2018 backed by an improved economy. The company expects operating earnings before interest, taxes, depreciation and amortization (EBITDA) margin of around 16% (the metric is estimated to be around 14% in 2017). Additionally, the carrier projects an average fleet size of 118 (2017 projection stands at 116) and expects capacity (available seat kilometers) to expand between 1% and 3% in 2018. Volume of departures are anticipated to grow in the band of 1% to 3% (2017 guidance projects the metric to decline approximately 5%).
Another important metric, load factor (percentage of seats filled by passengers) is projected in the band of 79% to 80% in 2018 (the metric is estimated to be around 79% in 2017). Going forward, we expect the company’s focus on capacity discipline to result in increasing yields.
Zacks Rank & Other Stocks to Consider
Gol Linhas sports a Zacks Rank #1 (Strong Buy). Investors interested in the airline space may also consider Deutsche Lufthansa AG DLAKY and SkyWest, Inc. SKYW. While SkyWest sports a Zacks Rank #1, Deutsche Lufthansa carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Deutsche Lufthansa and SkyWest have surged more than 43% and 100%, respectively, year to date.
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