GOL Expects To Raise Over $550 Million In Liquidity

GOL Linhas Aereas expects to raise over to US$550 million by the end of the third quarter. Despite the recent controversy and the launch of several investigations against Brazilian airline, GOL is optimistic about the future. Let’s investigate further.

GOL expects to raise US$550 million in liquidity by the end of the third quarter of 2020. Photo: GOL Linhas Aereas

How did GOL do during the second quarter?

During the second quarter of 2020, GOL posted a net loss of almost two billion reais (over US$380 million) due to the coronavirus pandemic. Added to the red numbers it also had during the first quarter, the carrier has had a net loss of over US$825 million in 2020.

At the same time, the company maintained an optimistic look due to the measures it took to face the crisis. Paulo Kakinoff, GOL’s CEO, said,

“To offset the steep decline in revenues, we took several measures to decrease costs and preserve liquidity. We reduced our average daily cash expenditures to three million reais (US$577,611) in the second quarter.”

The airline also increased its daily flights from an all-time low of 50 in March to 120. By June, GOL recorded a 60% growth in the search for airline tickets. It also had a 108% increase in ticket sales compared with May.

Nevertheless, the Brazilian carrier had a 92.3% decrease in passenger revenue during the quarter. Incredibly, the load factor didn’t drop that much, as it was of 78.1% during the second quarter, compared to 82% during last year.

The Brazilian airline has seen a 92.3% decrease in passenger revenue. Photo: GOL Airlines

What’s the planned capacity for the third quarter?

The outlook for the third quarter is as optimistic as it can get during the current crisis. Brazil recently opened up its borders for international travelers coming through the air.

With that in mind, GOL’s planned capacity for the quarter represents a 300% growth over the last three months. The company also estimates to operate an average of 69 aircraft and expects to end September with 74 airplanes.

Also, during the third quarter, GOL expects to raise its liquidity and end with US$550 million in liquidity and over US$2.5 billion in adjusted net debt. It will also have a leverage of 4.4x.

Nevertheless, during the last few days, the investigations against GOL are piling in.

Seven attorney offices in the US are launching independent investigations against GOL. Photo: GOL Linhas Aereas

There are more investigations against GOL

On Tuesday, we reported that the Pomerantz Firm launched an inquiry against GOL on behalf of the carrier’s investors. The investigation concerns “whether GOL Linhas and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.”

The investigation is happening after GOL fired its external financial auditor, KPMG.

Since that day, six more investigations have been launched against GOL. Howard G. Smith, Holzer & Holzer, LLC, Frank R. Cruz, Rosen Law Firm, Glancy Prongay & Murray LLP, and the Schall Law Firm are behind these investigations.

The Schall Firm is encouraging any investor with losses of US$100,000 to contact it. During the week, we contacted GOL for a comment on this topic, but the airline refused to issue a statement. We also contacted Pomerantz Firm for additional comments to no avail.

What do you think of GOL’s second-quarter results? Let us know in the comments.