GOL reports Q4 and full year 2017 results

Eleanor Steed
By Eleanor Steed March 7, 2018 16:13

GOL reports Q4 and full year 2017 results

During the fourth quarter of 2017, GOL Linhas Aéreas Inteligentes (GOL) reports that its revenue passenger kilometres (RPKs) increased by 8.0% (from 9.2 billion in 4Q16 to 9.9 billion in 4Q17), mainly due to a 6.2% increase in the number of passengers. GOL achieved this strong growth in demand despite its continued focus on pricing; average yield per passenger increased by 3.1% in the quarter compared to 4Q16, reaching 26.36 cents (R$). Supply growth remained conservative, with ASKs increasing 3.5% compared to 4Q16 (driven by a 1.6% increase in take-offs and a 1.8% stage-length expansion). As a result, the average load factor in 4Q17 grew 3.4pp compared to 4Q16, reaching 81.0%.

For full year 2017, RPKs increased by 3.6% (primarily due to a 4.8% higher stage-length), with yields growing by 2.2%; ASKs increased by only 0.8%. Load factor was 79.7%, 2.2 pp increase compared to 2016.

The combination of higher demand and improved pricing resulted in net revenue for the quarter of R$3.0 billion, an increase of 11.8% compared to 4Q16. For full-year 2017 the figure was R$10.6 billion, 7.2% higher than the prior year. GOL‟s current 2018 guidance is for net revenue approximately R$11 billion.

Total costs, measured in CASK, in 4Q17 was 21.21 cents (R$), just 1.4% higher than in 4Q16, in spite of a less benign jet fuel environment.

GOL’s EBIT margin continued to expand, reaching 13.0% in 4Q17, the highest fourth-quarter indicator since 2011 and a 5.6 pp improvement over 4Q16. Operating income (EBIT) in 4Q17 was R$388.0 million, an increase of 95.7% compared to 4Q16.

For full year 2017, EBIT margin was 9.4%, a growth of 2.3 pp compared to 2016, and the operating income reached R$1.0 billion. GOL’s current 2018 guidance is for an EBIT margin of approximately 11%.

“We expect to continue to drive our efficiency and technology advantage this year, as well as incorporating the new Boeing 737 MAX 8s in the second half of 2018. With a range of up to 6,500 km, the new 737 MAX 8 aircraft will allow GOL to offer non-stop flights from Brazil to any destination in Latin America, as well as to our recently announced destinations in Florida,” commented Paulo Kakinoff, CEO.

In the fourth quarter 2017, GOL’s domestic supply increased by 2.8% compared to the year-ago period. Demand increased by 7.9% and load factor reached 81.7%, an increase of 3.9 percentage points compared to the fourth quarter of 2016. In 2017, domestic capacity rose by 0.9% compared to 2016, while demand increased by 3.8% in the same period. Load factor increased by 2.3 percentage points to 80.2% in 2017.

GOL transported 8.1 million domestic passengers in the quarter, representing an increase of 6.8% when compared with the same period in 2016.

GOL’s international supply increased by 9.6% in the quarter compared to 4Q16. In 2017, the ompany showed an increase of 0.2% when compared to 2016. International demand increased 9.2% in 4Q17 when compared to 4Q16 and was up 2.2% in for 2017 when compared to 2016. International load factors in 4Q17 were 75.3%, decreasing 0.3 p.p. over 4Q16. In 2017, load factors reached 76.1%, a growth of 1.5 p.p. in relation to 2016. During the quarter, GOL transported 0.5 million passengers in the international market, an increase of 6.5% when compared to the fourth quarter of 2016.

Eleanor Steed
By Eleanor Steed March 7, 2018 16:13