GOL Teams Up With Passaredo - Analyst Blog
May 21 2012 - 7:15AM
Zacks
Last week, GOL Linhas
Aereas Inteligentes S.A. (GOL) declared that it has signed
a long-term agreement with Passaredo Linhas Aereas. This has been
done with the clear intent of ameliorating regional operational
efficiency with an eye to heightened customer satisfaction.
Passaredo will create and manage a
regional network targeting medium and low-density markets which
would conflate with GOL’s routes. Destinations added to GOL’s
network would now include Araguaina, Alta Floresta, Pampulha (BHZ),
Barreiras, Carajas, Ji-Parana, Juazeiro do Norte, Londrina,
Cascavel, Ribeirao Preto, Rondonopolis, Vitoria da Conquista, Sao
Jose do Rio Preto, Sinop and Uberlandia.
The Interline contract would not
only diversify GOL’s network but also offer easy-connectivity and
flexible travel options to its clients. Complexities arising from
flight transfers shall be mitigated through this venture, thereby
reducing time lags and unnecessary traveling hassles.
GOL reported its first quarter
financial results during the first week of May this year. While net
revenues generated were robust, the international route network
demand deteriorated nearly 17% annually. We can be hopeful that
contracts like this would surge performance levels in this segment
incipiently as the company traverses through 2012.
Catering to customer needs and
global network expansion are attributes not singular only in the
case of GOL. On May 16, 2012, American Airlines, a subsidiary of
AMR Corp. (AAMRQ), signed an application with the
U.S. Department of Transportation to add 17 weekly frequency
flights from U.S. to Brazil. Thus, it is imperative that GOL
remains wary of such proactive moves made by big players in the
industry it pertains to.
The company currently retains a
Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.
However, we presently maintain our ‘Neutral’ recommendation on the
stock.
AMR CORP (AAMRQ): Free Stock Analysis Report
GOL LINHAS-ADR (GOL): Free Stock Analysis Report
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