Gol reported a first-quarter loss on Friday as higher fuel and other operating costs offset efforts by Brazil’s second-largest airline to rein in expenses.
The São Paulo-based carrier lost a net BRR41.4 million reais (USD$21.6 million) in the first quarter, compared with profit of BRR54.3 million a year earlier, due to higher fuel and payroll costs, according to a securities filing.
In the wake of the report, showing the airline’s third straight quarterly loss over the past 12 months, Gol said it was committed to downsizing and to focusing on tapping the busiest air travel markets in Brazil.
Revenue per kilometre rose 10.2 percent in the first quarter, while unit costs per kilometre, a gauge of cost efficiency known as CASK, rose at a slower 6.6 percent pace from a year earlier. On a sequential basis, CASK excluding fuel costs – the most volatile item in Gol’s cost line – fell 3.9 percent.
“The results for the quarter show that the adopted measures are beginning to show results,” chief executive Constantino de Oliveira said in the filing, adding that further plans to curb costs were being implemented.
Gol shares have plunged 15 percent over the past month, as an aggressive growth plan met slowing air traffic growth in Latin America’s largest economy. The stock has shed 53 percent over the past 12 months.
This year, Oliveira has pledged to put profitability before growth by trimming fleet, cutting at least 80 daily flights and laying off employees. From 150 aircraft in 2011, the fleet will shrink to 138 planes this year, and 136 in 2013, the company said.
Earnings before interest, taxes, depreciation, amortisation and rental leases, EBITDAR, rose 8.9 percent from a year earlier to BRR267.93 million reais.
Net revenue grew 14.3 percent to BRR2.166 billion reais from the year-earlier period, but fell 3 percent on a quarter-on-quarter basis, Gol said. Costs and operational expenses jumped a combined 22.6 percent to BRR2.158 billion reais; they fell 4.8 percent on a sequential basis.
EBITDAR fell to 12.4 percent of revenue, compared with 18.7 percent a year earlier, the filing said. The so-called EBITDAR margin rose from 11 percent in the fourth quarter of 2011, signalling an improvement in Gol’s cost and expense structure, the company said.
Non-operating revenue rose 10.8 percent faster than financial expenses, underscoring Oliveira’s efforts to protect the company against swings in interest rates and the currency.
The difference between both items produced a shortfall of BRR23.211 million reais in the quarter, mainly after Gol assumed debt-servicing costs of its WebJet subsidiary and renegotiated terms of some debts with creditors.