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GOL Linhas AereasInteligentes S.A. (NYSE:GOL) reported air traffic figures for October. Traffic, measured in revenue passenger kilometers (RPK), increased 8.1% to 3.12 billion in the month.
On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) rose 1.9% to 3.87 billion, primarily because of growth of 1.7% and 3.9% in domestic and international capacity, respectively. Domestic and international RPK in October also climbed 9.1% and 0.3%, respectively. The carrier further witnessed an 8.3% increase in passenger count in the month.
Load factor — percentage of seats filled by passengers — rose to 80.6% from 76% in October 2016, owing to traffic expansion exceeding capacity growth.
At the end of the first 10 months of 2017, RPK increased 2.7% while ASK inched up 0.1%. Moreover, load factor for the period improved 200 basis points. However, the company recorded a 5.1% reduction in the number of seats on a year-to-date basis, while volume of departures fell 5.4%.
The company recently raised the guidance for 2017 while releasing third-quarter financial numbers. It now expects operating earnings before interest and taxes (EBIT) margin — a measure of the company’s earnings ability — to be around 9% (previous guidance had projected the metric between 7% and 9%). Also, EBITDA margin is anticipated to be around 14% (previous guidance: between 12% and 14%). (Read more: GOL Linhas Beats on Q3 Earnings & Revenues, Stock Up).
Zacks Rank & Key Picks
Gol Linhas carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the airline space are International Consolidated Airlines Group (LON:ICAG) SA (OTC:ICAGY) , Deutsche Lufthansa (DE:LHAG) AG (OTC:DLAKY) and SkyWest, Inc. (NASDAQ:SKYW) . While International Consolidated Airlines sports a Zacks Rank #1 (Strong Buy), Deutsche Lufthansa and SkyWest carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of International Consolidated Airlines, Deutsche Lufthansa and SkyWest have surged more than 45%, 100% and 25% respectively, on a year-to-date basis.
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