Gol Linhas' (GOL) Traffic & Load Factor Increase In April

Gol Linhas Aereas Inteligentes S.A. (NYSE:GOL) reported air traffic figures for April. Consolidated traffic, measured in revenue passenger kilometers (RPK), nudged up 1.9% to 2.76 billion. The metric rose 3% on the domestic front while the international figure declined 7.2%.

On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) inched up 0.8% to 3.46 billion, primarily on the back of 1.3% growth in domestic capacity. The carrier further witnessed 3.5% increase in passenger count in the month.

Load factor — percentage of seats filled up by passengers — rose to 79.9% from 79% in April 2017 owing to traffic expansion exceeding capacity growth. This improvement indicates the company’s focus on capacity discipline, which is likely to result in higher yields. The rise in load factor is also likely to boost the company’s profitability. This is because higher load factor implies that fixed costs are spread across more passengers.

At the end of the first four months of 2018, RPK climbed 3.9% while ASK expanded 2.8%. Moreover, load factor for the period improved 90 basis points. Also, the company recorded a marginal rise in the number of seats and volume of departures on a year-to-date basis.

The company is scheduled to report first-quarter 2018 earnings on May 9. Results are likely to benefit from strong demand for air travel. Notably, the Zacks Consensus Estimate for the to-be-reported quarter earnings has been revised 27.3% upward in the last 30 days.

Zacks Rank & Other Key Picks

GOL Linhas carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader Transportation sector include SkyWest, Inc. (NASDAQ:SKYW) , Cathay Pacific Airways Ltd. (OTC:CPCAY) and Expeditors International of Washington, Inc. (NASDAQ:EXPD) . While SkyWest sports a Zacks Rank #1 (Strong Buy), Cathay Pacific Airways and Expeditors hold a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest, Cathay Pacific Airways and Expeditors have rallied more than 54%, 13% and 19%, respectively, in a year.

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