Brazil airline Gol sees profitability rebound in 2013

Thu Dec 6, 2012 12:34pm EST

* Executives forecast improving profit margins

* CEO eyes PRASK growth of 10 pct or more in Dec

SAO PAULO Dec 6 (Reuters) - Brazilian airline Gol Linhas Aereas expects profit margins to recover in 2013 after slashing available flights and closing operations of its Webjet subsidiary, executives told analysts and investors on Thursday.

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 with cooling consumer demand.

By shuttering Webjet, Gol intends to cut as many as 850 jobs and eliminate flights in order to improve ticket pricing. As a result net passenger revenue per available seat-kilometer, a gauge of airline profitability known as PRASK, could rise 10 percent or more, Chief Executive Paulo Kakinoff told analysts.

"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 $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.

Gol shares lost 1.3 percent in Thursday trading to 10.17 reais, while the benchmark Bovespa stock index slipped 0.2 percent.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.