During the first half of 2020, GOL Linhas Aereas reduced its fleet by 11 Boeing 737-800 leased aircraft, due to the current coronavirus crisis. The Brazilian carrier said it expects to return more airplanes in the second quarter and more between 2021 and 2022. Additionally, GOL shed some light on its current Boeing 737 MAX order and the near future of the company. Let’s investigate further.

How many airplanes will GOL return?

A couple of days ago, we wrote about the possible retirement of airplanes in Latin America due to the pandemic. In that article, we discussed the possibility of GOL returning up to 30 leased Boeing 737 NG airplanes. Now, the company has shed some light on its plans.

In 2020, GOL expects to return 18 Boeing 737-800 leased aircraft. It has already given back the first 11. The final seven will go back to the leasing companies during the second half of the year.

Additionally, the Brazilian airline says it has the flexibility to further reduce its fleet in 2021 and 2022 by returning another 30 aircraft.

By the end of the first half of 2020, GOL ended with a total fleet of 130 B737s, said the company. That being said, the carrier has the possibility of reducing further its fleet to 93 airplanes, if we exclude the deliveries of the new MAXs.

GOL’s fleet is 100% under operating leases. Regarding this scheme, the carrier says certain lessors have asked to modify lease arrangements. According to a press release seen by Simple Flying, it also said,

“...it will evaluate all potential alternatives to ensure and maintain its world-class fleet, important lessor relationships, and leadership as a low-cost airline.”

What about the MAX?

In 2018, GOL increased its total MAX orders to 135 (it already has six). The Brazilian carrier was set to become the largest MAX operator in Latin America. It also planned to renew its aging B737 NG fleet with the newer MAX model.

Nevertheless, since 2018, history has not been kind either with Boeing or with GOL. Back in April 2020, GOL Linhas Aereas canceled 34 MAX orders, after more than a year-long grounding of the single-aisle family. This reduced its standing order from 129 to 95.

One month later, GOL and Boeing agreed a $412 million compensation due to the MAX crisis.

Now, GOL is saying that it will receive fewer MAX airplanes than it initially expected to do. It said,

“Additionally, GOL reduced its 2020-2022 Boeing 737 MAX deliveries by 47 and Capex to a total of R$ 280 million (52.4 million USD) for July to December, with plans to fully finance all aircraft.”

The ramp-up has only just begun

During June, GOL operated 27 aircraft out of its 130 units. At the beginning of the month, its flight operations were 13% of last year’s June, and by the end, GOL ramped it up to 17%. It reopened five bases and increased flights between Sao Paulo and Rio de Janeiro.

For July, GOL is increasing to approximately 250 flights per day. The carrier expects its operations to be around 25% of the July 2019 schedule. It will operate 36 aircraft and reopen 14 bases across Brazil.

The recovery in Latin America is merely just starting. GOL knows it and is planning accordingly. The carrier expects to maintain personnel costs at 40% to 50% of pre-pandemic levels during the third quarter. It also estimates that it still has over 12 months of cash-on-hand.

During June, GOL had a net cash burn of US$374,461 per day. In contrast, the carrier had a surge in sales during this month. Per day, GOL had sales and receipts of approximately USD$1.8 million. It said,

“June recorded a 60% growth in the search for airline tickets. As a result of this greater interest, the company recorded an increase in ticket sales of 108% compared to May.”

Altogether, the next few months will be a critical time for the Latin American industry. Restrictions are expected to be relaxed slowly, and more aircraft should soon be deployed.

What do you think of GOL’s strategy? Let us know in the comments.