Gol Linhas (GOL) March Traffic Dull Due to Coronavirus Woes

With the coronavirus pandemic ravaging air-travel demand, Gol Linhas Aereas Inteligentes S.A.’s GOL consolidated traffic, measured in revenue passenger kilometers (RPK), declined 29.7% to 2.2 billion. Demand decreased both domestically (27.4%) as well as on the international front (42.9%), thanks to coronavirus-induced travel restrictions.

With Gol Linhas cutting capacity in response to dwindling demand, consolidated capacity (measured in available seat miles) contracted 22.2% to 3.08 billion. Notably, all international flights have been cancelled for the Mar 28-May 3 period. Additionally, the airline slashed its domestic capacity by 92% for the same period.

Coming back to the March traffic report, occupancy rate fell to 71.6% from 79.3% in March 2019 as the traffic descent was more than the capacity contraction. The metric dropped7 percentage points to 72.8% domestically and 12.5 percentage points to 63.8% internationally. Notably, the weakness in occupancy rate was mainly due to the waning air-travel demand in the latter half of the month.  Notably, occupancy rate was a healthy 82% (domestically) in the Mar 1-Mar 13 period.

The extremely bleak air-travel demand scenario can be gauged from the fact that Gol Linhas, which competes with the likes of Copa Holdings CPA, LATAM Airlines LTM and Azul AZUL in the Latin American aviation space, carried 33.5% less passengers last month than a year ago.

Due to dismal air-travel demand, shares of GOL Linhas have tanked 49% in the past month compared with its industry’s 37.6% decline.

Additionally, Gol Linhas carries a Zack Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
 
Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
 
LATAM Airlines Group S.A. (LTM) : Free Stock Analysis Report
 
AZUL SA (AZUL) : Free Stock Analysis Report
 
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