GOL Remains Optimistic Despite US$414 Million Net Loss In 2021’s First Half

GOL Linhas Aereas posted a US$414 million (nearly 2.1 billion Brazilian reais) net loss in 2021’s first half,…

GOL Remains Optimistic Despite US$414 Million Net Loss In 2021’s First Half

GOL Linhas Aereas posted a US$414 million (nearly 2.1 billion Brazilian reais) net loss in 2021’s first half, the company reported in its financial results. Despite an ongoing recovery, the Brazilian market is far from rebounding from the COVID-19 pandemic, and the carrier is feeling the impact. Let’s investigate further.

GOL had a net loss of over US$400 million in 2021’s first half. Photo: Getty Images

A look into GOL’s financial results

During the first half of the year, GOL had net operating revenues worth US$511 million. That number is a 25.9% decrease compared to 2020’s first semester and a 59% decrease against 2019’s January to June.

GOL’s total passengers onboard numbered nearly 7.5 million during the first half of this year. Compared to 2020, that’s a decrease of 17.3%, despite the fact that Brazilian aviation (like elsewhere) was severely impacted by the COVID pandemic starting in April 2020.

During this past half, the Brazilian carrier had a total of 52,459 departures, offering 9.2 million seats available. It operated an active fleet of 65 aircraft (out of 127 units available).

GOL ended the first half of 2021 with a potential liquidity of US$985 million (approximately five billion Brazilian reais).

GOL Boeing 737-800 Getty
GOL believes there will be a surge in business travel starting in 2022. Photo: Getty Images.

GOL is optimistic about the next months

All things considered, GOL’s first half of 2021 was a rough one. Despite that, GOL’s management is optimistic and confident about the near future.

The airline managed to contain cash burn and has repaid approximately US$1.18 billion in debt since the beginning of 2020, becoming one of the few carriers worldwide to do it.

Additionally, GOL believes the vaccine rollout in Brazil will help the airline soar again. Paulo Kakinoff, GOL’s CEO, said during the airlines’ investor call,

“Brazilians are not hesitant about getting vaccinated. We are confident that approximately 85% of over 30s in Brazil will be immunized at the end of the third quarter this year.”

Moreover, the airline sees a business travel sharp recovery happening as soon as 2022’s first quarter. Richard Lark, GOL’s CEO, said,

“Now that clearly that the worst portion of the crisis is behind us, we see several promising perspectives ahead. The company has navigated through the worst possible circumstances, and we are more than strong. We didn’t lose the opportunity to enhance our successful business model further. Now we are even leaner than we were before; we are more efficient.”

Based on that, GOL projects serve up to 168 routes during the second quarter. It plans to resume its international connectivity and increase its operating fleet to 102 units. The carrier expects to have net operating revenues of as much as 5.4 billion Brazilian reais (US$1.07 billion).

GOL Getty B737 MAX
GOL currently has a fleet of 127 aircraft and has a big order for new Boeing 737 MAX units. Photo: Getty Images

A brief look at GOL’s fleet

GOL Linhas Aereas finished the half with a fleet of 127 aircraft. The carrier has 94 Boeing 737-800 aircraft, 23 B737-700, and ten Boeing 737 MAX.

According to its financial results, the carrier still has to receive 63 B737 MAX 8s and 22 B737 MAX 10s in the future.

GOL intends to return six operational aircraft in the next few months, with the flexibility to return even more if necessary.

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

Source : Simple Flying More   

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Startup Avelo Airlines Adds 4 New Routes From Los Angeles

Burbank Airport-based Avelo Airlines is launching four new routes from the airport this fall. Over September and October,…

Startup Avelo Airlines Adds 4 New Routes From Los Angeles

Burbank Airport-based Avelo Airlines is launching four new routes from the airport this fall. Over September and October, Avelo will begin nonstop flights to Monterey, CA, Fort Collins-Loveland, CO, and Provo and St. George, UT. The new flights will see Avelo flying to 12 destinations from Burbank over the coming months.

Avelo is adding four new airports to its schedules in September and October. Photo: Getty Images

New Avelo flights to Utah, Colorado, and Monterey

Beginning September 17, Avelo Airlines will fly between Burbank (BUR) and Provo (PVU) on Mondays and Fridays. On September 30, flights between Burbank and Monterey (MRY) will start, operating on Thursdays and Sundays. Flights to Fort Collins-Loveland (FNL) begin on October 6. Avelo will fly to FNL on Wednesdays and Saturdays. Finally, St George (SGU) will see flights on Thursdays and Sundays from October 7.

 “These new routes will provide our LA Customers with unmatched affordability and direct access to four beautiful unserved destinations across the Western US,” said Avelo Chairman and CEO Andrew Levy.

Avelo Airlines flies a fleet of Boeing 737s. Photo: Getty Images

Avelo is one of the highest-profile airline startups this year. Ditching LAX in favor of Burbank, Avelo’s off-piste choice of hub airport has grabbed plenty of attention. Since late April, Avelo’s small fleet of Boeing 737 aircraft have steadily built up the number of destinations served.

It hasn’t all gone without a hitch. Recently, Avelo said it would soon end flights to Grand Junction, CO, and Bozeman, MT. Attributing the decision to “customer insights” (or, in simple speak, a lack of demand), Avelo said running an airline successfully depended on flying to where customers want to go.

Avelo is betting their new destinations prove more popular than their flights to Grand Junction and Bozeman.

Stay informed:  for our daily and weekly aviation news digests.

A clever Avelo strategy

Avelo’s strategy of targeting regional airports and unserved city pairs is also a clever way of snatching market share from more popular routes that track close to Avelo’s route.

Fort Collins-Loveland Airport is only a 20-minute drive from Loveland’s ski resorts. Vail, Copper Mountain, Winter Park and Eldora Mountain are a little further afield, but Avelo says it is quicker to access those resorts from Los Angeles by flying BUR-FNL than the more traditional LAX-DEN option. Avelo also says moving through their smaller airports is a faster and less stressful experience than passing through big airports like Los Angeles International and Denver.

“Avelo has shown a commitment to partner with smaller, more convenient airports,” says Fort Collins-Loveland Airport Director Jason Licon.

Not lavish, but Avelo’s 737s provide inexpensive and convenient flights. Photo: Getty Images

Provo Airport is a 45-minute drive to downtown Salt Lake City and sold as an alternative to Salt Lake International Airport (SLC). Provo Airport is also only a 60-minute drive from the Utah ski fields.

As airlines fight for market share in the United States, Avelo is moving into the ultra-low-cost carrier space. It is the same space Frontier Airlines and Spirit Airlines occupies and a tier below the low-cost Southwest Airlines.

Aside from using low fares to drive demand, airlines like Avelo that focus on underserved city pairs have scope to grow in big markets like the United States. Aside from cost factors, flying a multi-city route to get from A to B takes time. An airline like Avelo that focuses on unserved city pairs that cuts out the need to connect can carve out a small but profitable market niche. And all those market niches add up.

Source : Simple Flying More   

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