GOL today provides its investor update for the month of August
Since the last update on July 31, 2020, increased its capacity to an average of 190 flights a day in August to service the 20% improvement in demand for air travel
GOL Linhas Aéreas Inteligentes S.A, Brazil's largest domestic airline, today provides its Investor Update for the month of August. All information is presented in Brazilian Reais (R$). The information below is preliminary and unaudited.
Since the last update on July 31, 2020, GOL increased its capacity to an average of 190 flights a day in August to service the 20% improvement in demand for air travel relative to July. In the month, GOL's consolidated gross sales were over R$500 million and average load factor was over 79%.
"GOL's flexible and efficient operating model enables us to quickly add routes as demand for travel resumes by adjusting our network almost simultaneously," said Paulo Kakinoff, CEO. "We also have the balance sheet discipline and sufficient liquidity to meet our debt obligations, finance our operations, accelerate profitable growth and assert our competitive advantage in the market."
Management will continue to diligently maintain equilibrium in the Company's cash flow, matching resources to demand levels. Management believes GOL's ability to execute on this is exceptional in the South American aviation market due to the following factors: its high efficiency structure composed predominantly of variable costs; its focus on domestic operations in Brazil; the continued support of its stakeholders and partners; and its use of a single aircraft type that provides for significant fleet and operational flexibility.
Added Kakinoff: "In the past six months, the global airline industry faced unparalleled challenges. GOL's differentiated operating model, investments in technology, strong balance sheet and trust among our Customers gave us an exceptional advantage in meeting these challenges. Moments like these provide GOL with the opportunity to once again prove the resilience of its business model. We firmly believe that GOL will strengthen its position in the South American aviation market."
Increasing GOL's Flight Capacity to Meet Demand
GOL ended the month of August 2020 with a total fleet of 130 B737s. With 60 aircraft operating in its network, the planned re-opening of four bases and an increase in flights between São Paulo and Rio de Janeiro, flight operations increased 7% over July and were equal to 26% of the same month last year. During the month, GOL ramped up to a peak of 260 daily flights, increasing frequencies in its hubs in Guarulhos, Galeão and Brasília.
With an increase to approximately 300 flights per day, September 2020 operations should be near 40% of the September 2019 schedule. During this month, GOL will be operating 74 aircraft in the network and plans to re-open three more bases.
Through the end of August 2020, GOL reduced its fleet by nine Boeing 737 leased aircraft and plans to return an additional seven aircraft by year-end. The Company can reduce its fleet by up to another 30 aircraft in 2021-2022 if needed, with the flexibility to reduce further if demand is lower. Additionally, GOL reduced its 2020-2022 Boeing 737 MAX deliveries by 47 and plans to fully finance all aircraft capex and engine overhauls remaining in 2020.
GOL does not have aircraft financed in the capital markets, EETCs or finance leases. Its operating fleet is 100% leased and has received support from its partners in the form of deferrals, discounts, and variable power-by-the-hour payments on some aircraft. The agreements secured monthly lease payments in-line with the recovery of demand during 2020 and 2021 and won't impair GOL's post-pandemic cost structure with expensive deferral-only agreements. GOL also ensures the maintenance of its world-class fleet, important lessor relationships and market leadership as a reliable, low-cost and efficient airline.