Gol Linhas' Expedited Fleet Renewal Plan To Boost Efficiency

Gol Linhas Aereas Inteligentes S.A. (NYSE:GOL) recently announced the acceleration of its fleet renewal and modernization plan on account of operational gains and buoyant market conditions. As a result, the company’s operating lease agreement with Avolon for 11 Boeing (NYSE:BA) 737 MAX 8 aircraft will be executed soon with delivery expected in the second half of 2019. Additionally, the company expects to take delivery of 135 Boeing 737 MAX aircraft by 2028.

This superior variety of aircraft equipped with several modern amenities for an enhanced customer experience not only offers greater fuel efficiency and lower costs per seat but also an extended range to begin new routes.

Gol Linhas started operations on the 737 MAX 8 aircraft this July. The aircraft is said to have reduced the carrier’s fuel consumption by approximately 15%. Moreover, the wide range of 737 MAX 8 aircraft has enabled the airline to expand operations with new flights to North America. In fact, the speed-up of the fleet modernization plan is projected to help Gol Linhas introduce an international service every quarter over the next couple of years.

While the stepped-up fleet renewal plan is underway, the company will return and/or sell 737 Next Generation (NG) aircraft under operating and finance leases. Thus, Gol Linhas’ focus on capacity discipline will remain intact.

Zacks Rank & Key Picks

Gol Linhas carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Air France-KLM (OTC:AFLYY) , International Consolidated Airlines Group (OTC:ICAGY) and Spirit Airlines (NYSE:SAVE) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Air France-KLM and Spirit have rallied more than 24% and 64%, respectively, in the past six months. Meanwhile, the International Consolidated Airlines stock boasts an impressive earnings history, having topped the Zacks Consensus Estimate in three of the last four reported quarters, the average beat being 92.9%.

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