Gol Increased Its Domestic Market Share
By Brian Straus, Air Transport World | Jul. 24, 2006
Demand that outpaced capacity, floundering competition and effective cost and fuel management resulted in another good quarter for Gol, which finished the three months ended June 30 with a net income of BRL106.7 million ($48.8 million), an increase of 45.4% over the BRL73.4 million earned in the second quarter of 2005."Through the addition of aircraft and flight frequencies during the quarter, Gol significantly increased its domestic market share [by 6 points to 35%] and further consolidated its position as the second-largest domestic airline in Brazil," CEO Constantino de Oliveira Junior said.
The airline added five leased 737s--bringing its fleet to 50 aircraft--62 flights and one destination (Santarem) during the quarter, helping drive a 50.1% rise in operating revenue to BRL844 million as traffic growth helped offset falling yields. Expenses climbed 49.2% to BRL711.8 million helped by a strengthened real and fuel hedges that resulted in a 1.9% year-over-year drop in fuel cost per ASK. Operating profit surged 55.6% to BRL132.3 million from BRL85 million.
Traffic was up 57.3% to 3.52 billion RPKs as capacity grew 50.4% to 4.64 billion ASKs and load factor improved 3.3 points to 75.9%. A 9.6% increase in average fare to BRL190.4 balanced a 4.7% decline in yield to BRL22.33 cents and a 0.3% dip in passenger RASK to BRL18.19 cents. Unit costs also fell--CASK was down 0.9% to BRL15.32 cents, or 0.2% to BRL9.2 cents excluding fuel.
Gol said it expects a "solid" third quarter during which it will add six aircraft and increase year-over-year capacity by 45%. The revenue environment will be "improved" as yields come in at BRL26-28 cents, and it plans to reduce its non-fuel CASK further. It issued full-year guidance forecasting BRL4.1 billion in revenues and annual earnings growth of more than 50%.
The carrier earlier announced the addition of two daily flights to Buenos Aires, doubling its daily frequency to four. One is routed Rio de Janeiro Galeao-Sao Paulo Cumbica-EZE and the second starts in Florianopolis with a stop in Porto Alegre.