Gol Sees Profitability Rebound In 2013

December 7, 2012

Bookmark and Share

Brazilian airline Gol expects profit margins to recover in 2013 after cutting available flights and closing operations of its Webjet subsidiary, executives told analysts and investors.

The forecast offered the first clear targets for the airline's rebound after posting a net loss in five of the past six quarters. Rising fuel prices and a weaker local currency have battered profitability as a poorly timed growth plan met cooling consumer demand.

By closing Webjet, Gol intends to cut 850 jobs and eliminate flights in order to improve ticket pricing. As a result net passenger revenue per available seat-kilometre (PRASK) could rise 10 percent or more, chief executive Paulo Kakinoff said.

"There is the possibility of double-digit growth in the short term. And the short term is now, in December," said Kakinoff. Gol's PRASK grew 4 percent in October from the same period of 2011.

Kakinoff said he is also seeking more partnerships with foreign airlines like the 2011 deal with Delta Air Lines. Delta invested USD$100 million in the Brazilian carrier as part of a strategic alliance expanding a codesharing agreement and giving it a seat on Gol's board.

"As we did with Delta, we are in talks with a few companies, focusing on the principal European destinations," Kakinoff said.