On Friday, GOL Linhas Aereas Inteligentes S.A. (GOL) announced its preliminary passenger traffic figures for December 2009.
In December, Gol’s total passenger traffic grew by 34.8% in relation to the same period last year, reflecting Gol’s better positioning in its markets in 2009 and increased demand due to recovery in Brazil’s economy.
Domestic passenger traffic increased 36.2% in relation to December 2008, and international passenger traffic increased 23.9% year over year.
Increase in domestic passengers was primarily due to the start of summer season from December. International traffic was up due to adjustments to Gol’s international network, which sought to improve this segment’s profitability by launching new routes between Brazil and the Caribbean with flights to Aruba and Curacao, and adjustments to the frequency of flights to Argentina, Colombia, Chile, Bolivia and Venezuela. In addition, international traffic benefited from the decline in the U.S. dollar exchange rate and the economic recovery in Brazil and South America.
In the third quarter of 2009, domestic passenger traffic increased 31.3%, while its international passenger traffic decreased 52.7% due to its decision to discontinue intercontinental routes.
However, Gol remains better positioned to capitalize on the raise of discounted air travel in Brazil and the rest of Latin America given its strong market share and efficient operations. We expect Gol to experience growth in the short-to-medium term given its continued investment in fleet renovation and international agreements.
Moreover, Latin American and China’s airline stocks have performed well in 2009. We believe that 2010 may be another profitable year for the airlines industry in emerging markets provided the overall economy continues to grow. Current estimates for 2010 suggest that the economic growth in emerging markets will be higher than developed markets.
Thus, we maintain an Outperform recommendation on the shares of Gol.
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