Brazil’s Gol Airline Could Make Domestic Flight Cuts: Daily

By William Jones, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Brazilian airline Gol has cited a reduction in the country’s growth forecast as a reason for slashing its domestic network of flights, which has already been reduced by fourteen percent since 2011. This announcement has sparked concern over the ability of football (soccer) fans to travel between the twelve cities that will host the FIFA World Cup in 2014.

According to a Central Bank survey published yesterday, economists are expecting growth of Brazil’s GDP to slow to 2.1 percent next year after expanding 2.5 percent in 2013. This has led to Gol Chief Executive, Paulo Kakinoff, to suggest that domestic flights will need to be slashed in the future amid an already struggling business.

“The forecast of stability [in 2014] should be considered a ceiling. It does not mean we have ruled out future reductions,” Kakinoff told investors in São Paulo. “A key factor that we are not in a good position to predict is GDP.”

In May, the airline announced it would be cutting 4,000 jobs before posting a seventh consecutive quarterly loss this month and reported a net loss of R$197 million (US$85 million) in the third quarter of this financial year. The possibility of Gol restricting its flight charters would make travel during the World Cup extremely difficult when 600,000 fans are expected to descend on the country. This has caused some to suggest the use of external companies to assist with transport if Gol makes such cutbacks.

Gol’s Chief Financial Officer Edmar Lopes quashed the fears of a shortage of flight availability during next year’s international tournament after proclaiming that “during the World Cup you have an increase in leisure but a decrease in business travel,” in an interview with the news agency Reuters.

Read more (in Portuguese).

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