What Are GOL’s 9 Pillars Of Travel Resumption In Brazil

GOL Linhas Aereas has nine main initiatives for the resumption of travel and Brazil’s air transportation market recovery. Among these initiatives, GOL’s Boeing 737 MAX fleet, the cargo segment, and the transportation of the COVID-19 vaccines throughout the South American country have key roles. Let’s investigate further.

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GOL lost $416 million in 2020. Photo: Getty Images.

GOL’s financial performance in 2020

Yesterday, GOL Linhas Aereas held its investor call after publishing its 2020’s fourth-quarter results. Like almost every airline globally, the airline’s results were deeply impacted by the COVID-19 pandemic. Paulo Kakinoff, GOL’s CEO, said,

“As the most challenging year in the history of commercial aviation comes to a close, we continue to be focused on managing the impacts of the COVID-19 pandemic in our business.”

In 2020, GOL lost $416 million due to the pandemic. In the last three months of the year, GOL lost $156 million after carrying 5.2 million passengers, a 46% year-on-year decline.

Nevertheless, the airline roared with an increase in travel demand during November and December, Brazil’s high season.

During the final quarter, GOL operated an average of 403 daily flights, 54% of what it had the previous year. It served 177 markets and reopened the last six domestic hubs it had closed due to the crisis. These results helped GOL to maintain liquidity of nearly $470 million at the end of the year.

GOL is a low-cost carrier and has held the leading market share in Brazil for five years. To keep it that way, the airline outlined nine initiatives for the resumption of travel.

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GOL has eight Boeing 737 MAX, and 95 on order. Photo: Getty Images

A closer look at GOL’s initiatives

The first one is keeping its employees and customers healthy. On December 16, the airline received the Einstein Certification for its strict Health and Safety protocols. Additionally, GOL is helping speed up the transportation of COVID-19 vaccines throughout Brazil. Sometimes, it is even assisted rival carriers to achieve this goal; last month, GOL carried LATAM’s luggage, freeing space in LATAM’s aircraft to carry on vaccines.

Therefore, GOL has also worked to increase its cargo network. The airline recently launched Super Expresso, a service that enables same-day parcel deliveries. Additionally, GOL signed a partnership to improve multimodal delivery services in Brazil. Despite that, GOL’s cargo revenues fell 25.2% in 2020.

Financially, GOL is working towards a cash flow equilibrium. The Brazilian carrier has undertaken the necessary initiatives to minimize fixed costs and temporarily postpone payments. This has allowed the airline to maintain a good level of liquidity and a healthy debt.

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GOL operated 403 daily flights in December. Photo: Getty Images

The capacity struggle

Nevertheless, there’s still the issue of restoring domestic and international capacity. GOL is currently not flying outside of Brazil, but it is expected to do so in the following weeks.

We’ve talked about how GOL roared up in November and December due to an increase in domestic travelers. Now, that’s changing. Therefore, GOL is reacting to that. The airline said,

“In response to the significant reduction in sales, increase in cancellations and no-shows, GOL’s network was reduced by 4% between the first and fourth weeks of February to adjust its costs to the level of inflows.”

For March 2021, GOL will operate at approximately 40% of what it had last year before the pandemic arriving in Brazil. In February, GOL operated 355 flights per day, decreasing from the 403 it had in December. It also reduced its operating fleet to 59 aircraft to control costs.

These three measures (cooling on travel demand, adjust the capacity, and enhancing GOL’s cost advantage) are also part of its initiatives.

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GOL has the largest share of the Brazilian domestic market. Photo: Getty Images

The Boeing 737 MAX key role

Finally, GOL is putting all its chips on the Boeing 737 MAX. The airline was the first to fly commercially again with the MAX.

Currently, GOL has eight 737 MAX units and expects to receive nine additional deliveries in 2021. The airline has an order for the future delivery of 95 MAX aircraft (after reducing it from 129).

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Moreover, as GOL receives new MAX aircraft, it will replace its older NG fleet. This year, it will replace approximately 15% of its NG fleet. This measure will accelerate the resumption of Cost Per Available Seat-Kilometer (CASK) to levels comparable to the pre-pandemic period, said GOL. Paulo Kakinoff said,

“This state-of-the-art aircraft is a core pillar of GOL’s strategy for further strengthening its sustainability as a business. The 737 MAX aircraft promotes a 16% reduction in carbon emissions and consumes 15% less fuel than the 737 NG”. 

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

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