Gol revises downwards 2011 projected operating margin

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Brazilian carrier Gol has revised downwards its projected operating margin for 2011, citing higher fuel costs and other expenses.

It is now forecasting an operating margin of 1% in the worst case scenario and 4% in the best, down from 6.5% and 10% previously, due to lower yields in 2011 and other factors.

Among these factors are fuel costs, which were around 250 million reais ($159 million) higher than initially expected. Fuel costs accounted for almost 40% of overall costs in the first half of 2011, said Gol.

The airline also cited other expenses that will depress the operating margin, such as expenses associated with flight cancellations due to the Puyehue volcano eruption in Chile and the early return of three Boeing 767 aircraft.

In addition, the airline also expects additional costs incurred from the hiring of 395 co-pilot trainees and the termination of contracts with suppliers, which is aimed at future savings.