Brazil’s Gol Air posts profit as real gains on dollar

Gol Linhas Aereas Inteligentes SA, Brazil’s second-biggest airline, posted a profit of 77.9 million reais ($45.8 million) as a stronger Brazilian currency helped shave expenses.

Gol Linhas Aereas Inteligentes SA, Brazil’s second-biggest airline, posted a profit of 77.9 million reais ($45.8 million) as a stronger Brazilian currency helped shave expenses.

The carrier’s third-quarter net income compared with a net loss of 510.7 million reais a year earlier, according to a regulatory filing today. Revenue fell 16 percent to 1.5 billion reais.

Brazil’s real gained 10 percent against the U.S. dollar in the quarter, helping cut costs denominated in foreign currency, including a 35 percent drop in fuel expenses. Sao Paulo-based Gol also was able to trim dollar-linked debt payments.

“The real increase was very good for Gol,” Kelly Trentin, head of research at SLW Corretora in Sao Paulo, said before the earnings release. She advises buying Gol shares. “Still, a price war in Brazil in the third quarter pushed yields down. And that isn’t good.”

The profit beat the median estimate of 58.2 million reais among three analysts surveyed by Bloomberg News. The results were reported according to International Financial Reporting Standards.

Gol rose 55 centavos, or 2.8 percent, to 20.50 reais today in Sao Paulo trading.

Gol and Tam SA, Brazil’s biggest carrier, reduced fares last quarter to stoke demand and fend off discounters such as David Neeleman’s Azul Linhas Aereas Brasileiras. Lower prices helped Gol fill 66 percent of available seats in September, compared with 57 percent a year earlier.

Yield, or the average fare for each kilometer flown, fell 30 percent from the same period in 2008, Gol said. Average fares declined 36 percent from a year earlier.

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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