Brazil's Gol expects to continue to steadily grow its domestic traffic but considers the 47% year-over-year RPK figure it posted for October to be an aberration.
According to data released by Brazil's ANAC earlier this week, Gol's domestic RPKs surged 47% in October to 2.2 billion RPKs compared to only 1.5 billion RPKs last October. Gol only slightly outpaced the rest of the Brazilian airline industry, which overall saw RPKs surge by 42% in October to 7.4 billion RPKs.
"We expect this October growth will not be consistent going forward," Gol CEO Constantino de Oliveira Junior told analysts during the carrier's third quarter conference call. "We are still seeing a scenario where there will still be growth but it will be at more realistic levels than the October levels."
Oliveira says the big traffic gains at Gol and the industry overall was partly driven by lower fares, which stimulated demand. Gol and TAM were engaged in a major fare war the entire month of October which reduced walk up fares by about 70%.
Oliveira says the lower fares, which drew heavy criticism from Wall Street analysts, had "a positive impact" on both revenues and traffic "although we understand there are different ways of raising revenue".
The fare war, which began in mid September, ended last weekend with walk-up and other fares returning to close to the levels they were in the first half of September.
"We believe we have done the right thing now in putting the restrictions back," Oliveira says. "Most likely the demand [going forward will not grow] like it did in September and October but we're still working on a scenario where there will be consistent growth in the revenue line."
Gol, which over the last year has focused on growing its business traffic, captured 42% of the domestic market in October. This is second only to TAM, which saw its domestic market share drop from 52% to 45% despite a 22% increase in traffic. TAM's capacity was up only 10%, compared to the 15% increase at Gol.
Fast-growing Azul, Webjet and TRIP also have been gaining market share at the expense of TAM. Azul, which launched operations last December, captured 4.4% of the market in October and had an industry-leading 87% load factor.
Webjet captured 4.5% of the market compared to 3.3% last October as its RPKs surged by 94%. Its ASKs grew by 87% as its load factor improved from 65% to 67%.
TRIP reported 75% growth in RPKs and 65% growth in ASKs as its load factor improved from 61% to 64%. The regional carrier, which has been expanding rapidly this year as it takes a new fleet of Embraer E-175s, says it is on pace to end 2009 with 1.6 million passengers carried and a fleet of 30 aircraft.
TRIP now has 1.7% of the domestic market based on RPKs. The airline has been rapidly expanding its network which now includes 73 destinations but is expected to reach 80 by year-end. For example, TRIP says it launched at the end of last month six weekly ATR 72 flights on the Foz do Iguacu-Porto Alegre-Cuiaba route.
Finally, Avianca sister carrier OceanAir captured 2.3% of the domestic market in October, down from 2.5% a year earlier. It reported 30% growth in RPKs in October but a 32% growth in ASKs. As a result it was the only major Brazilian carrier to see its load factor slip in October.
Industry-wide the average domestic load factor was 73%, up from 62% in October 2008.