Brazil’s Gol is happy with lack of capacity in airline industry

Brazil’s second largest airline, Gol, will grow a little less this year than it planned thanks to delays receiving new aircraft from Boeing. But while that may not sound good, management is perfectly fine with the situation. The São Paulo-based carrier has shaved five percentage points of capacity growth from its forecast for 2023, to up 15-20% year-over-year. The reduction is due to delays receiving new 737 Max aircraft, Gol CEO Celso Ferrer said during the carrier’s fourth-quarter earnings call Wednesday. At the same time, travel demand is strong with bookings “performing very well” since the beginning of the year, Ferrer said. And while corporate travel volumes are down 25-30% from 2019 levels, revenues in the lucrative segment have fully recovered. And what happens when demand outstrips supply of air travel? Travelers pay more, and higher revenues are critical for Gol especially as the airline faces the double expense whammy of high oil prices and a strong US dollar; many major airline expenses, including aircraft leases and fuel costs, are paid in dollars. “We are ramping up the capacity in the domestic market, very cautiously to maintain the unit revenues that became very crucial for us,” Ferrer said. Gol’s yields were up 45% from 2019 levels — or 25% year-over-year — in Q4. That increase was driven by robust travel demand, particularly among leisure and visiting friends and relatives traffic, while overall airline capacity in Brazil was down about 1% from three years earlier, Diio by Cirium schedule data show. Hence the delay of new 737 Maxes is not a top concern for Gol management this year. The airline ended 2022 with 38 of the aircraft; six fewer than the 44 planes it had expected. This year, Gol anticipates adding 15 more Maxes for 53 by December. The 2023 number, however, is still three fewer aircraft than Gol had forecast for the year as recently as October.<br/>