GOL's second-quarter loss doubles

The airline’s operations shaken by high fuel prices and unfavourable macroeconomic environment.

Turbulence: a Gol plane at Congonhas Airport in Sao Paulo, Brazil. Credit: Getty Images

The Brazilian low-cost airline Gol Linhas Aéreas Inteligentes, which trades as GOL, has reported a second-quarter net loss of 805 million reais, more than double its loss of 358 million reais the previous year.

This was mainly due to the 23 per cent average depreciation of the real against the dollar variation and jet fuel prices.

Net revenue increased by 16.9 per cent to 1.83bn Brazilian reais (2011: 1.56bn Brazilian reais), primarily due to the 15.3 per cent upturn in consolidated demand.

Total net revenue per available seat kilometer (RASK) grew by 6.3 per cent year-on-year, while consolidated operating costs and expenses were 2.18bn Brazilian reais.

The consolidated operating result (EBIT) was a negative 354.6m Brazilian reais (2011: 270.8m Brazilian reais).

Paulo Sérgio Kakinoff, CEO of GOL, and Constantino de Oliveira Junior, founder and chairman of the board of GOL, said in a statement:

The company’s second-quarter results reflect the unfavorable macroeconomic scenario for the civil aviation sector. High fuel costs, depreciation of the real against the dollar, which has a direct impact on 55 per cent of the company’s operating expenses, and higher costs with Brazilian aviation fees, all had a substantial effect on GOL’s results as well as on the domestic air transport industry as a whole.

Accordingly, the company revises in this quarter earnings release its financial guidance for 2012, but maintains its ex-fuel cost estimate stable despite this scenario.