GOL reports R$119.2m operating income in 4Q09

GOL Linhas Aéreas Inteligentes has announced its results for the fourth quarter of 2009.

In 4Q09, GOL posted operating income (EBIT) of R$119.2 million, with an operating margin of 7.4%, up 121.2% on the R$53.9 million (margin of 3.5%) recorded in 4Q08 and 20.3% higher than the previous quarter (R$99.1mm, with a margin of 6.6%). The company believes the improvement results from its competitive advantages (higher flight frequency between domestic airports, low-cost model adherence, high indicators of punctuality, regularity, safety, and differentiated client service), as well as increased demand on the domestic and international markets.

Fourth-quarter net income totalled R$397.8 million, compared with a loss of R$541.6 million in 4Q08 and income of R$77.9 million in 3Q09. The 4Q09 result benefited from the use of tax credits worth R$352.0 million recognised in income tax and social contribution line, resulting from the fiscal losses generated by VRG, acquired in 2007.

GOL successfully reached its target with a cash position of R$1.4 billion, which strengthened its balance sheet, closing the year with cash and cash equivalents of R$1,441.7million, equivalent to 23.9% of annual net revenue. This was 117.5% up on 3Q09 and 143.7% up year-over-year, thanks to a series of initiatives to increase operating cash flow.

The airline reports that VoeFácil, its programme which enables tickets to be sold in instalments, has been the main tool for encouraging demand and attracting Brazil’s middle-class to air transport. The strategy is based on five pillars: (i) lower fares than those offered by interstate bus companies as long as passengers book in advance; (ii) payment in up to 36 monthly instalments; (iii) guidance on airport and flight procedures; (iv) the advantages of flying over ground transport; and (v) a marketing strategy based on specific channels, such as segmented advertisements in publications and media outlets in regions and neighbourhoods with a high density of middle-class, in preference to unsegmented ads and the national media.

The standardised and renewed fleet of Boeing 737-700 and 737-800 aircraft on its regular flights, with an average age of 6.3 years, also played a part, reducing maintenance costs and fuel consumption, while increasing aircraft utilisation and operating efficiency. GOL closed the year with 108 operational aircraft and a total fleet of 127 aircraft.