Shares of Gol Airlines crashed by 11 percent at the opening of the market on Monday, after the company released grim projections on its Q1 earnings report that are set to be repeated across the entire commercial aviation sector. Though Brazil’s largest airline still managed to profit BRL 173 million in the first three months of the year, it forecasts a 70-percent drop in revenue for Q2 as a direct result of the Covid-19 pandemic — which has grounded nearly all planes in the country. Gol expects Brazil’s GDP to plunge 5 percent this year.
Looking closer at the earnings report’s details, Gol’s first-quarter results excluded non-recurring expenses which added up to BRL 2.26 billion, including negative foreign exchange fluctuations of BRL 2.5 billion, one-off revenues of BRL 87.5 million and BRL 17.9 million in expenses related to exchangeable debts and capped call options.
The airline says it managed to slash 2020 costs by roughly BRL 2.4 billion through cutting board members’ salaries, reducing employee working hours and suspending job contracts, halting investments, and delaying payments to suppliers and taxes. As a result, Gol expects to reduce its daily losses from roughly BRL 22 million in March to “just” BRL 9 million in June, and BRL 7...
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