Gol details reasons behind losses, revises 2012 capacity guidance

Washington DC
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Brazilian carrier Gol has blamed a weakening in the country's economy and the depreciation of the Brazilian real among other reasons for the 715 million reais ($353 million) net loss it posted in the second quarter.

Gol chief executive Paulo Kakinoff, who took over the helm of the airline in July, cited in an earnings call a revised forecast of the Brazilian gross domestic product (GDP) growth for 2012 downwards to 1.5% to 2.5%, from 3% to 4% previously.

The depreciation of the Brazilian real against the US dollar had a direct impact of 55% of Gol's operating results, he adds.

Kakinoff also points out that jet fuel prices reached a historical high in Brazil during the quarter, and that landing fees increased 35% during the period.

As a result of these challenges, Gol has revised downwards its full-year capacity guidance for 2012, says Kakinoff. Full-year ASKs will now decline by up to 2% to 4.5%, down from a fall of 2% previously.

The carrier, however, is maintaining its guidance for cost per available seat kilometre excluding fuel for 2012 at nine to 9.6 Brazilian cents.

Kakinoff has emphasised a continued focus on cost discipline as the airline seeks to return to profit. Gol dropped about 130 unprofitable daily flights operated by itself and Webjet, which it is acquiring, during the second quarter.

It also laid off 1,500 jobs in April as part of a restructuring to reduce costs.