MIAMI – GOL (G3), Brazil’s largest airline, published an investor update covering results for April 2021 and anticipating a return to pre-pandemic liquidity levels.
While navigating the pandemic crisis, G3 continues with its policy to keep investors updated on finance and operational issues and is watching the developments of the national vaccination program, accompanied by a decrease in Covid cases and an expected return of air travel demand.
This would be the base for a return to a quarterly update, the next one being expected in July and to concern the second financial quarter (Q2)."We remain committed to transparency for our investors, as always, as the need for regular monthly updates subsides with the return of our liquidity to pre-pandemic levels." Paulo Kakinoff, GOL CEO Click To Tweet
“We will refocus our efforts on communications about the Company’s priorities in the post-pandemic recovery, which by their nature will be more medium-term. We are excited to share more details with you in our next quarterly update,” commented GOL CEO, Paulo Kakinoff.
As far as results are concerned, during April 2021 G3 sales increased by 75% in volume over the preceding month while the airline operated flights to 67 destinations, flying approximately 200 services on peak days. Consolidated gross revenue stood at approximately US$47.4m (BRL250m) with an average load factor of 83%.
Signs of Recovery
The G3 management focus is to maintain sustainable operations by matching seat availability to traveler’s demand. Passenger Revenue per Available Seat Kilometer (PRASK) stands at US$5.42 (BRL20.58) and shows an increase of 38% over March 2021 and a +5% over the same month in 2020 thanks to better ticket pricing and dynamic yield management.
This is also combined with the signs of a recovery in demand showing a positive trend after the second Covid-19 wave that hit Brazil. G3 has shown a neutral net cash burn for the month of April, excluding financial debt service and shows the lowest financial burden when compared to other similar airlines.
Gol ended April showing a short-term debt of approximately US$379m (BRL2bn) – compared to US$749m (BRL3.9bn) in Q2 of 2020 – out of which US$303m (BRL1.6bn) is made up of working capital loans. Amortization up to US$133m (BRL700m) is expected during 2021.
New Shares Issuance
On April 28, the Costantino Brothers, which hold majority control of G3, led an equity capital increase, by the issuance of new shares, of US$97m (BRL512m) out of which US$51m would be acquired by the controlling shareholder. On May 6 G3 successfully offered US$300m of additional secured notes.
GOL intends to use the proceeds from the note issuance for general corporate purposes which will include liability management and aircraft acquisition. The airline ended the month of April with approximately $683m (BRL3.6bn) in total liquidity; with the inclusion of the note issuance proceeds; expected to conclude in june, the G3 balance sheet will show over $759m (BRL 4bn) in liquidity.
This expected result will be in line with the pre-pandemic amount of liquidity registered in 2019 and, with the inclusion of a financeable amount of deposits and unencumbered assets G3 potential liquidity will total at over US$1.32bn (BRL700bl).
Featured image: GOL Boeing 737-800 PR-HSW. Photo: Joao Pedro Santoro/Airways