Brazil-based GOL Linhas Aéreas Inteligentes S.A. (NYSE: GOL) (B3: GOLL4) has announced it presented an Investor Update for April 2020 with information on capacity, cash consumption and liquidity, the company said.
As the COVID-19 pandemic situation develops, GOL will continue to provide monthly updates of results and liquidity to its constituents and stakeholders in the spirit of transparency.
The company is in a robust position with over 10 months of cash reserves to shield and strengthen it through this crisis. GOL believes it will be well-positioned in the market in a recovery due to its domestic network that serves both business and leisure travelers.
GOL made the necessary cost reductions and shored up liquidity to withstand the crisis. To preserve cash, management acted on a variety of cost-saving measures, including the deferral of heavy maintenance costs and over 6,000 voluntary employee leaves of absence (~40% of its workforce).
The Company has grounded 120 aircraft (~92% of its fleet) since March 28 and flights in April were operated from the Guarulhos airport in São Paulo to all of Brazil´s state capitals and the federal capital in Brasilia, which represents 7% of the April 2019 schedule.
By the end of May, operations are expected to be at 12% of last year´s schedule, with the planned re-opening of the bases at the Foz de Iguaçu, Navegantes and Maringá airports, and the re-initiation of a limited number of flights from the Congonhas airport in São Paulo to the Santos Dumont and Galeão airports in Rio de Janeiro.
GOL reduced its gross cash operating costs from BRL 9 million/day in April, and expects BRL 8 million/day for May, which excludes revenue, ATL refunds, and non-aircraft debt payments.
GOL had a net cash burn of BRL 6 million/day in April, which includes revenues of approximately BRL 5 million/day. With the implementation of the government´s Provisional Measure No. 925, most passengers are rebooking and taking vouchers rather than refunds, limiting net revenue-related cash outflows. Payroll costs were further reduced with cuts in management salaries, reduction in hours and a higher number of voluntary unpaid leaves.
The Company is in discussions for BRL 750 million to BRL 1.0 billion in financing secured by unencumbered assets (at an LTV of 50-60%). It currently has BRL 1.7 billion of unencumbered assets.
GOL has approximately USD 100 million invested in a portfolio of 17 million barrels of oil for the monthly periods from May 2020 to December 2022. Approximately 65% of the Company´s portfolio is in out of the money call options (USD 55 average cap price) with premiums paid for in prior periods.
GOL serves more than 37 million passengers annually. With Brazil´s largest network, GOL offers customers more than 750 daily flights to over 100 destinations in Brazil and in South America, the Caribbean and the United States.