Photo Boeing/Gol |
The Brazilian Gol Linhas Aereas Inteligentes posted a massive loss this week - BRL$2.3 billion reals, roughly US$419.2 million or £332.1 million which it blames on the depreciation of the Brazilian currency.
The airline says that it believes it has enough cash to last the rest of the year and that the ongoing coronavirus COVID-19 didn't really affect its first-quarter results too greatly, however, warned the same could not be said for the second quarter.
Some highlights of Q1 for Gol included. Revenue Passenger Kilometer (RPK) decreased 6.4% totalling BRL$9.9 billion, while Available Seat Kilometer (ASK) reduced 4.4% quarter-over-quarter. GOL transported 8.3 million customers, a decrease of 6.7% the same period last year.
The carriers net revenue was BRL$3.1 billion, a decrease of 2.0% compared to the same quarter last year., whereas cargo and other revenues increased by 16.4% to BRL$206.4 million and the airline's operating costs and expenses decreased by approximately 17% to 67.4%, from 84.2% against last year.
The Company amortized R$1.2 billion of principal and interest of debt and lease obligations in the quarter, including the early amortization of R$426.6 million of Senior Notes. The total liquidity was R$4.2 billion, of which R$3.0 billion cash and short-term investments and R$1.2 billion of receivables.
“We are experienced at navigating in times of stress,” said Paulo Kakinoff, GOL‟s CEO. “Our flexible fleet model has always been a differentiating strength for GOL, and we were fast to adapt even when the impact of COVID-19 was still being understood. We are focused at this moment on three priorities. First, protecting the health and the safety of our employees and customers. Second, preserving the financial liquidity of the company to work through this crisis. And third, ensuring we are well-positioned for the continuity of our successful business, when activity returns, through a robust plan to return to normal operations.”
In the wake of the coronavirus COVID-19 pandemic, the carrier has temporary stopped operating almost all flights, deferred some lease payments, delayed the delivery of new aircraft and entered negotiations with a number of creditors and suppliers. “By acting with speed and decisiveness, we have reduced our fixed costs to preserve the jobs of our employees and the company‟s working capital in the short term. This will provide us with the necessary liquidity to weather the storm,” said Kakinoff.
Gol is in a positive position moving forward with its liquidity, thanks in part to a massive payment of BRL$447 million the firm received in April from Boeing as part of its compensation package following the grounding of the Boeing 737 MAX jets. The agreement with the US manufacturer sees Gol terminate 34 orders, reducing the remaining firm orders for 737 MAX aircraft from 129 to 95 and also, in March, the Company concluded the sale and leaseback operations for 11 Boeing 737 NG aircraft.
The airline's management offers the following comment on the situation: "We are effectively managing our business through this crisis and the current financial situation of GOL is sound. As the scale of this challenge became clear in early March, we initiated a rigorous review of the company's budget to preserve working capital. We aimed at cost containment through the elimination of nonessential items. Through these actions, we achieved approximately R$2.4 billion in cost reductions, capex eliminations and payments postponements for 2020.
The company is also grateful to the Government of Brazil for its quick response in mitigating the impacts on Brazilian airlines. GOL further supports the actions to mitigate, at least partially, the impact on passenger transportation services.
In such extremely challenging circumstances that Brazil and the world are experiencing, the company recognizes its responsibility to plan for the conscientious use of available resources, taking into account that the Safety of its Customers and Employees is, and always will be, the number one value of GOL."
Gol has seen its daily schedule drop from 800 flights a day pre-COVID-19 to around 50 and those that are currently operating and doing so at much-reduced loads. GOL has heightened its strict standards of sanitation and implemented additional advanced measures for aircraft cleaning and sanitizing during ground stops and overnight stays.
GOL's aircraft have HEPA filters, which capture 99.7% of particles such as bacteria, viruses and other impurities on board, allowing the circulation of purer air. In addition, the company improved the process for night cleaning with the use of a hospital-grade disinfectant for the service galleries and all areas of intense use in the cabin, including the cockpit. The Company has distributed gloves and masks to Employees, who can use them in flight, in addition to making alcohol-based gel available to the crew and customers on the aircraft.
Recommended for you...