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Southwest Airlines Talked About Boeing 737 Max

By June 27, 2019No Comments

Many Year Passed since the launch of low-cost airline Gol Linhas , which is the Brazilian equivalent of Southwest Airlines.

The carrier has all Boeing 737 in their fleet of 122 jets, this fleet also includes seven of the MAX model planes, which have been grounded world-wide since March. Due to this What’s the airline market in Brazil has shrunk to three players from four. On the other hand, Avianca Brasil, which is the fourth largest airline company in the country filed the bankruptcy in December and has ceased operations. GOL CEO Paulo Kakinoff said “Now the industry is all focused on creating shareholder value.”

The industry restructuring has already affected GOL shares, sending them up 24% year to date, outpacing the Brazilian BOVESPA Index. Low-cost competitor Azul ’s (AZUL) shares are up 24% year to date. LATAM Airlines which is the largest air carrier of Brazil has lagged behind, with its stock dropping 10% so far in 2019.

Gol trades for about 16 times estimated 2020 earnings, a premium to U.S.-based carriers that trade for, on average, less than 10 times estimated 2020 numbers. The Gol multiple is justified, in part, by expectations profit margins will improve because of the industry restructuring.

This is the weakest period of the year for Brazilian air travel, so we haven’t needed those planes yet. But we are looking forward to getting the plane back. It’s a great aircraft, with better fuel burn and superior range.

We’ve flown seven jets for more than 12,000 hours, without incident. GOL was flying the longest 737 MAX flight from Brazil to Orlando before the plane was grounded. Now we have to fly that route with a layover in the Dominican Republic stated by kakinoff.

When asked about Avianca Brasil bankruptcy he added.They were the irrational player in the marketplace. Now there is a process to either auction or distribute their fleet and slot.