Gol Linhas' Stepped Up Fleet Renewal Plan To Reduce Debt

Gol Linhas Aereas Inteligentes S.A. (NYSE:GOL) has yet again announced the acceleration of its fleet renewal and modernization plan. This time, the carrier plans to expedite its fleet renewal process with Castlelake and Apollo Aviation by replacing 13 Boeing (NYSE:BA) 737 Next Generation (NG) aircraft with Boeing 737 MAX-8 aircraft in the next few years. The sale of these 13 737-800 NGs will cut down the Brazilian carrier’s net debt by approximately R$1.1 billion.

The revved-up fleet renewal process on account of favorable market conditions will take place during the 2019-2021 period. Despite the sped up fleet modernization plan, Gol Linhas’ capacity discipline will remain unaltered as the 737 NG aircraft will be returned simultaneously on receiving the 737 MAX-8 aircraft including 11 of the same range of aircraft from the previous ramped up program (Read more: Gol Linhas' Expedited Fleet Renewal Plan to Boost Efficiency).

The 737 MAX-8 aircraft is expected to increase average seat per aircraft and reduce incremental cost per seat. Also, the premier range of aircraft is likely to lessen fuel consumption by approximately 15% compared with its 737-800 NG counterparts. The increased number of 737 MAX-8 aircraft will also enable the carrier to expand its network with international flights to the United States and Mexico.

The 737 MAX-8 aircraft is expected to constitute approximately 40% of Gol Linhas’ fleet by 2023. Moreover, over the next five years, the aircraft is anticipated to strengthen productivity by around 20%.

Gol Linhas Aereas Inteligentes S.A. Price

Gol Linhas Aereas Inteligentes S.A. Price | Gol Linhas Aereas Inteligentes S.A. Quote

Zacks Rank & Key Picks

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

Shares of Azul, Air France-KLM and Spirit Airlines have rallied more than 64%, 26% and 57%, respectively, in the past six months.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>