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Gonzalo
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Posts: 1838
Joined: Tue Aug 23, 2005 2:43 am

G3 Losses Deepens, Pesimistic Forecast

Wed Nov 13, 2013 3:43 pm

Last results show a loss of 85M U$D in the last three months, and this is the sixth consecutive report with a significant loss for the airline. Even worst, they don't expect a better performance in the foreseeable future, despite the demand should be much higher with the World Cup in Mid 2014....

I guess JJ, Azul and even some foreign carriers are more than happy with the current shape of G3....


Link in Spanish for now :

http://www.emol.com/noticias/economi...erdida-trimestral-consecutiva.HTML

G.
Gear Up!!: DC-3 / EMB-110 / FH-227 / A318-19-20-21 / B732 / B763 / B789 / B788 / A343 / ATR72-600
 
SKY1
Posts: 611
Joined: Sun Apr 09, 2006 11:03 am

RE: G3 Losses Deepens, Pesimistic Forecast

Sat Nov 16, 2013 6:08 am

I wonder "why" this bad performance.

What's wrong with G3? Brazil economy is not in bad shape plus their business cost must be lower than those JJ ones
Time flies! Enjoy life!
 
C010T3
Posts: 1956
Joined: Wed Jul 19, 2006 5:48 am

RE: G3 Losses Deepens, Pesimistic Forecast

Sat Nov 16, 2013 10:11 am

Quoting SKY1 (Reply 1):
What's wrong with G3? Brazil economy is not in bad shape plus their business cost must be lower than those JJ ones

Operating 187-seat 738s to everywhere doesn't work, but nobody dares to say that at Gol.
 
SKY1
Posts: 611
Joined: Sun Apr 09, 2006 11:03 am

RE: G3 Losses Deepens, Pesimistic Forecast

Sat Nov 16, 2013 2:50 pm

Most LCC's around the World are operating with an unique A320/B738 fleet between 175 and 189 seats and it doesn't seem can be a big issue.
Time flies! Enjoy life!
 
Summa767
Posts: 1846
Joined: Thu Mar 11, 2004 1:30 am

RE: G3 Losses Deepens, Pesimistic Forecast

Sat Nov 16, 2013 3:27 pm

Quoting SKY1 (Reply 3):
Most LCC's around the World are operating with an unique A320/B738 fleet between 175 and 189 seats and it doesn't seem can be a big issue.

I don't think it's a question of fleet alone, although it is true that Brasil is very diverse and more fitting capacity could be achieved with a more flexible fleet, but whether that would outweigh the cost of having more than one aircraft type would have to be seen.

For airlines in Brasil the problem seems to have been of oversupply, thus very low margins in domestic flights.
TAM, even though hugely dominant, had to some restructuring as well.
The country's economy slowing down below expectations has also not helped.
GOL knows it should fly more international destinations that would be more profitable, and that is their intention for next year.
 
PDPsol
Posts: 1226
Joined: Fri Feb 20, 2004 5:09 am

RE: G3 Losses Deepens, Pesimistic Forecast

Sat Nov 16, 2013 3:46 pm

Quoting SKY1 (Reply 3):
Most LCC's around the World are operating with an unique A320/B738 fleet between 175 and 189 seats and it doesn't seem can be a big issue.

True, but G3 is attempting to resolve a host of problems [of its own making] associated with its rapid growth over the past decade:

- current macroeconomic weakness in Brazil, with a depreciating BRL and key costs in USD, including fuel and debt
- massive capacity growth and a weak operating revenue environment in Brazil, G3 is desperately attempting to enhance its RASK while decreasing its capacity levels
- very elevated debt levels from prior growth, over BRL 3.4 billion of debt, with over 75% in USD

G3 and its management team did not have what was required to deal with massive growth over the past decade, a poor integration process with Varig and the current economic weakness in Brazil.

While G3 and its shareholders have suffered greatly over the past two years, there are several bright spots on the horizon, including an improving financial profile, a high domestic market share and a new alliance with DL as an investor.
 
brunomelo
Posts: 27
Joined: Thu Aug 08, 2013 3:07 am

RE: G3 Losses Deepens, Pesimistic Forecast

Sat Nov 16, 2013 6:48 pm

Hello guys!
I could be wrong, but remember seing reports and local news showing JJ and also AD turning big losses.
Although i see that G3 made many bad decisions (buying RG is just one of them), the economical environment is not good for any of the brazilian carriers.
Be safe.
Bruno.
 
MIflyer12
Posts: 6435
Joined: Mon Feb 18, 2013 11:58 pm

RE: G3 Losses Deepens, Pesimistic Forecast

Sat Nov 16, 2013 6:56 pm

Quoting PDPsol (Reply 5):
While G3 and its shareholders have suffered greatly over the past two years, there are several bright spots on the horizon, including an improving financial profile, a high domestic market share and a new alliance with DL as an investor.

Are you suggesting there will be a Delta investment beyond the $100 million announced in Dec. 2011?
 
PDPsol
Posts: 1226
Joined: Fri Feb 20, 2004 5:09 am

RE: G3 Losses Deepens, Pesimistic Forecast

Sat Nov 16, 2013 9:20 pm

Quoting MIflyer12 (Reply 7):
Are you suggesting there will be a Delta investment beyond the $100 million announced in Dec. 2011?

No, not at all. While the DL announcement was made almost two years ago, I still categorized it as "new".

DL is finally focused on the Latin American market and will, hopefully, give AA and its LATAM partners a good run for their money. The DL relationship is important because G3 is executing its conversion into a 'network carrier', with high-yielding traffic, from its so-called LCC roots. This includes more international connecting traffic on its aircraft and DL [and AM] is key to that.

G3 is not out of the woods yet, but is making some progress...
 
peterinlisbon
Posts: 1589
Joined: Wed Feb 01, 2006 3:37 am

RE: G3 Losses Deepens, Pesimistic Forecast

Mon Nov 18, 2013 12:37 am

I'm wondering if they could try Fortaleza or Natal to Cape Verde and on to Tenerife in the Canary Islands. That would connect Brazil to Europe and Africa and each of these flights would only be 2-3 hours, it would only take one 737 and it has to be more profitable than flying 3 hour domestic sectors for 70$.

http://www.gcmap.com/mapui?P=FOR-RAI-TFN-MAD&DU=km

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