We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Gol Linhas (GOL) Rides on Upbeat Air Traffic Despite Cost Woes
Read MoreHide Full Article
Gol Linhas is benefiting from buoyant air-travel demand (particularly on the leisure front). The company is carrying a Zacks Rank #3 (Hold), currently.
However, escalated fuel costs are limiting the bottom-line growth.
Factors Favoring GOL
The gradual improvement in air-travel demand is a huge boon for Gol Linhas. Owing to this tailwind, the company reported healthy traffic data for March. The number of passengers ferried on Gol flights in March registered a 22.3% year-over-year increase.
Consolidated load factor (% of seats filled by passengers) was 82.3% in March 2023 compared with 29.5% a year ago. Load factor increased as the consolidated traffic growth of 17.2% in the month was more than the capacity expansion (also on a consolidated basis) of 13.3%.
Domestic departures, which accounted for more than 95% of total departures during the month, have grown 17.4% on a year-over-year basis. On the domestic front, the number of seats increased 17.1% in March.
The deal with American Airlines (AAL - Free Report) is also a positive. In September 2021, Gol Linhas agreed to expand its commercial deal with AAL through an exclusive code-share agreement for the next three years to meet higher air-travel demand.
As a result of the code-sharing pact, passengers of either carrier can purchase tickets for the connecting flights using one reservation. This is expected to increase the demand for both carriers.
GOL has also acquired domestic airline MAP Transportes Aéreos Ltd, to meet additional air travel demand. The move can be expected to have a positive impact on the company’s top line.
Key Risk
Rising fuel prices due to the prolonged Russia-Ukraine war pose a threat to Gol’s bottom line. The average fuel price per liter increased 43.6% year over year in the fourth quarter of 2022. Primarily due to significant increases in fuel costs, total operating expenses increased 48.8% year over year.
For first-quarter 2023, GOL expects fuel price per liter to be R$5.7. The fuel price per liter is now predicted to be R$5.4 (prior view: R$5.3) for the current year.
An Airline Stock Worth Betting on
A better-ranked stock in the Zacks Airline industry is Copa Holdings (CPA - Free Report) .
Copa Holdings currently sports a Zacks Rank #1 (Strong Buy). CPA's focus on its cargo segment is very encouraging. In fourth-quarter 2022, cargo and mail revenues jumped 69% to $27.09 million, owing to higher cargo volumes and yields. You can see the complete list of today’s Zacks #1 Rank stocks here.
For first-quarter and full-year 2023, CPA’s earnings are expected to register 302% and 40.5% growth, respectively, on a year-over-year basis.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Gol Linhas (GOL) Rides on Upbeat Air Traffic Despite Cost Woes
Gol Linhas is benefiting from buoyant air-travel demand (particularly on the leisure front). The company is carrying a Zacks Rank #3 (Hold), currently.
However, escalated fuel costs are limiting the bottom-line growth.
Factors Favoring GOL
The gradual improvement in air-travel demand is a huge boon for Gol Linhas. Owing to this tailwind, the company reported healthy traffic data for March. The number of passengers ferried on Gol flights in March registered a 22.3% year-over-year increase.
Consolidated load factor (% of seats filled by passengers) was 82.3% in March 2023 compared with 29.5% a year ago. Load factor increased as the consolidated traffic growth of 17.2% in the month was more than the capacity expansion (also on a consolidated basis) of 13.3%.
Domestic departures, which accounted for more than 95% of total departures during the month, have grown 17.4% on a year-over-year basis. On the domestic front, the number of seats increased 17.1% in March.
The deal with American Airlines (AAL - Free Report) is also a positive. In September 2021, Gol Linhas agreed to expand its commercial deal with AAL through an exclusive code-share agreement for the next three years to meet higher air-travel demand.
As a result of the code-sharing pact, passengers of either carrier can purchase tickets for the connecting flights using one reservation. This is expected to increase the demand for both carriers.
GOL has also acquired domestic airline MAP Transportes Aéreos Ltd, to meet additional air travel demand. The move can be expected to have a positive impact on the company’s top line.
Key Risk
Rising fuel prices due to the prolonged Russia-Ukraine war pose a threat to Gol’s bottom line. The average fuel price per liter increased 43.6% year over year in the fourth quarter of 2022. Primarily due to significant increases in fuel costs, total operating expenses increased 48.8% year over year.
For first-quarter 2023, GOL expects fuel price per liter to be R$5.7. The fuel price per liter is now predicted to be R$5.4 (prior view: R$5.3) for the current year.
An Airline Stock Worth Betting on
A better-ranked stock in the Zacks Airline industry is Copa Holdings (CPA - Free Report) .
Copa Holdings currently sports a Zacks Rank #1 (Strong Buy). CPA's focus on its cargo segment is very encouraging. In fourth-quarter 2022, cargo and mail revenues jumped 69% to $27.09 million, owing to higher cargo volumes and yields. You can see the complete list of today’s Zacks #1 Rank stocks here.
For first-quarter and full-year 2023, CPA’s earnings are expected to register 302% and 40.5% growth, respectively, on a year-over-year basis.