GOL Airlines Gol will cut 200 flights weekly from August, mainly routes within Brazil. The strategy is part of the setting of the high-dollar company, said its president Paulo Sérgio Kakinoff at a news conference on Monday. The announcement splattered on the value of the shares of the company, which in the late afternoon were among the greatest losses of Bovespa.
Gol has 950 daily flights including domestic and international routes, and a total of 6,650 flights per week. But the cut, according to Mr. Kakinoff will not be linear, in other words, some days of the week will be less affected than others by the cuts.
Gol has about 55% of its operating costs linked to the dollar, mainly fuels (43%), which are priced in the U.S. currency, in addition to leasing expenses. Therefore, the need for adjustments to a new scene. On average international jet fuel accounts for 33% of costs.
According to Mr Kakinoff, the high dollar alone will cost £ 900 million to Brazilian airlines this year, if the U.S. dollar getting around R$ 2.25 this year.
This morning, Gol released a statement stating that it would cut 9% of its domestic supply, number worse than originally planned. The company’s previous expectation was that the number of flights would be cut by 7%. At the same time, Gol reiterated its target operating margin of between 1% and 3%.
“The external environment has evolved negatively to the company,” said Kakinoff. After these adjustments, the company president said no further cuts are planned. He also ruled out layoffs in the company.
In the new scenario, Gol revised its projections for dollar and Brazilian growth this year. Before, the company worked with dollar at R$1.95 to R$2.05 in the middle of 2013. Now, working with R$2.08 to R$2.18. For the Brazilian growth, the company changed the projection range of 2.5% to 3% to 2% to 2.5%. As for fuel prices the expectation from R$2.30 per liter for £2.40.
On the effects of the demonstrations at the company, Kakinoff said there was no reduction in demand for airline tickets. What has happened so far has an effect on the logistics of the operation. As an example, he cites the demonstrations in São Paulo, which on Friday closed access to Guarulhos airport, complicating the arrival and departure of passengers.
Asked if the company is considering issue debt to raise funds Kakinoff said the company has $ 3 billion in cash and does not intend to raise funds abroad or in Brazil at this time.