Brazil airline Gol says first quarter will be worse than expected due to pandemic second wave

Brazilian airline GOL to resume flying Boeing 737 MAX in Brazil
FILE PHOTO: A Boeing 737 Max airplane of Brazilian airlines GOL Linhas Aereas prepares to land at Salgado Filho airport in Porto Alegre, Brazil, December 9, 2020. REUTERS/Diego Vara

March 18, 2021

By Marcelo Rochabrun

SAO PAULO (Reuters) – Gol Linhas Aereas Inteligentes on Thursday said it was revising downward its outlook for early 2021, suggesting the pandemic’s second wave in Brazil is having significant negative impact on the air travel market.

While Gol had expected that Q1 revenue would come in at 2.4 billion reais ($429.72 million), it is now forecast to only total 1.7 billion reais. The new revenue estimate represents just 52% of a pre-pandemic levels, down from two-thirds.

Gol, Brazil’s largest airline, reported a modest profit of 16.8 million reais ($3.01 million) in the fourth quarter, which is part of Brazil’s high season. Still, Gol lost a total of 6 billion reais in 2020, in large part due to the pandemic that upended air travel.

Gol’s less optimistic outlook is just the latest sign that Brazil’s second coronavirus wave, which just this week hit record highs for daily deaths and new infections, is negatively affecting the economy as health restrictions hamper travel demand.

Gol said its March numbers were the most affected by the new wave and that it had had to reduce its flight schedule to 40% of pre-pandemic levels.

The airline also increased its expected cash burn for the first quarter to 3 million reais a day from an original estimate of 2 million reais a day.

($1 = 5.5850 reais)

(Reporting by Marcelo Rochabrun; Editing by Toby Chopra and Christian Plumb)