Brazil airline Gol profit tumbles as costs jump

Asher Levine – Reuters, 03/27/2012

Gol Linhas Aereas (GOLL4.SA), Brazil’s second-biggest airline, saw fourth-quarter net income tumble 58.9 percent from a year earlier as a spike in operating expenses ate into profit.

Total consolidated operating costs and expenses jumped 41 percent, with fuel costs rising 56.6 percent, personnel costs climbing 30.3 percent, and maintenance expenses increasing 147.8 percent.

“The company is fully aware that it is experiencing a scenario of new fuel cost and exchange rate levels, and adjusting the cost base to this new reality will be crucial in ensuring disciplined and sustainable growth in the years ahead,” Chief Executive Officer Constantino de Oliveira Junior said in a securities filing on Tuesday.

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Another casualty of Brazil’s rise: cheap airfare

Andrew Downie – CSM, 02/03/2012

Chief executive of the Brazilian airline Gol, Constantino Oliveira Jr., is shown at the company's headquarters in Sao Paulo, Brazil, in this 2005 file photo. Alexandre Meneghini/AP/File

When I interviewed the head of Gol Airlines for the Monitor in 2005, I was hugely impressed by his ethos of wanting to create a low cost, low fare airline for Brazil and take on the legacy carriers whose model he so disliked.

Constantino de Oliveira Jr. did exactly what he set out to do and his cut-price but high quality service – combined with an economic boom that brought millions of consumers into the Brazilian market – helped Gol bankrupt Varig, the country’s flagship carrier. Today, Gol vies with Tam for the position as Brazil’s No.1 airline.

The problem is that somewhere along the line de Oliveira Jr. dumped all that progressive talk of creating an alternative airline for the discerning and less well-off traveler and turned Gol into the kind of airline he was so keen to replace.

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Brazil airline ordered to reforest after pollution

Stan Lehman – AP/Miami Herald, 08/27/2011

A court has ordered Brazil’s second-largest airline to plant trees near Sao Paulo’s international airport to compensate for pollution caused by its passenger jets.

The Sao Paulo State Court of Justice says in a statement that Gol Lineas Aereas Intelligentes S.A. must reforest an area whose size has not yet been determined to compensate for pollution generated by departing and landing aircraft at the airport, located next to the city of Guarulhos.

A Guarulhos city hall spokesman says he expects the court will order the other 41 airlines operating at the airport to adopt similar measures. He spoke on condition of anonymity because he was not authorized to comment on the ruling.

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Brazil’s Gol agrees to buy Webjet to gain market share

Adriana Brasileiro – Bloomberg, 07/11/2011

Gol Linhas Aereas Inteligentes SA (GOLL4), Brazil’s second-largest airline by market share, agreed to acquire Webjet Linhas Aereas SA for 96 million reais ($61 million), as it seeks to recover market share in Latin America’s biggest economy.

Sao Paulo-based Gol said in a regulatory filing today that the deal valued closely-held Webjet at 310.7 million reais, according to a regulatory filing. Webjet, a low-cost carrier based in Rio de Janeiro and controlled by Guilherme Paulus, is Brazil’s fourth-largest airline, with 5.2 percent of the country’s airline market.

The deal gives Gol access to Webjet’s slots at Brazil’s main hubs and eliminates a low-cost competitor that catered to leisure passengers. Expansion may also help offset a squeeze in margins from higher fuel prices, said Felipe Rocha, an aviation analyst at Banco Fator SA in Sao Paulo.

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Brazil sentences two U.S. pilots to community service

CNN Wire Staff – CNN, 05/17/2011

Two American pilots involved in a plane collision over the Brazilian Amazon that resulted in the deaths of 154 people were sentenced to community service, a Brazilian judge ruled.

Judge Murilo Mendes originally sentenced Joseph Lepore and Jan Paul Paladino to four years and four days in prison, but then Monday commuted the sentence to community service to be carried out in the United States. They will also not be allowed to fly for four years and four days.

The sentence stems from a September 2006 incident where, according to court records, the Legacy 600 jet the two were piloting made contact with a Gol Airlines Boeing 737. The smaller jet made an emergency landing and all were safe, but all 154 passengers and crew aboard the large commercial jet were killed.

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