São Paulo-based low-cost carrier (LCC) GOL reported a 2017 second quarter net loss of BRL474.6 million ($144.2 million), reversed from a net profit of BRL252.5 million in 2Q 2016. The Brazilian LCC attributed the loss to foreign exchange and monetary variations in Brazil’s troubled economy, which fluctuated by over BRL1 billion between 2Q 2017 and 2Q 2016.

GOL’s total BRL425.3 million in 2Q 2017 financial expenses contrasted markedly with the company’s financial income of BRL543 million a year ago.

GOL’s operating revenues increased 7% year-over-year (YOY) to BRL2.2 billion, which the company attributed to rationalization of capacity, yield management and optimization of aircraft utilization.

Operating expenses decreased 2.3% to BRL2.2 billion, attributable to reduction in services to passengers, aircraft rents and maintenance, materials and repairs. The company posted an operating profit of BRL25.4million, reversing its BRL171.4 million operating loss in the year-ago quarter, representing an EBIT margin of 1.1%.

The company’s first-quarter net yield increased 4.8% to BRL 23.19 cents as RASK grew 10.2% to BRL 21.38 cents and CASK increased 0.7% to BRL 12.14 cents. GOL’s CASK ex-fuel fell 2.5% to BRL 15.11 cents. GOL’s fuel expenses during the quarter increased 6.4% YOY to BRL629.7 million.

GOL’s total passenger traffic was up just 0.5% during the quarter to 8.1 billion RPKS as the airline decreased capacity 3% YOY to 10.4 billion ASKs, producing a load factor of 77.9%, up 2.7 points from a year ago. GOL increased its aircraft utilization by 4.8% YOY to 11.3 block hours/day.

“We remain committed to respond to the macroeconomic environment with strong discipline in seat supply, growth in load factor, continuous improvement in customer experience and cost reduction to generate better operating results,” GOL CEO Paul Kakinoff said.

The company pointed to the introduction of five new Boeing 737 MAX 8 aircraft in the second half of 2018, the first of 21 scheduled for delivery by 2020. By the end of 2020, in addition to the incoming 21 MAX8s, GOL will have reduced its 737-800 fleet by five aircraft (compared to year-end 2017) to 86 total; as well as reducing its 737-700 fleet by seven aircraft to 21 total, for a total fleet of 128 aircraft compared to 115 projected for year-end 2017.

Mark Nensel mark.nensel@penton.com