Viewpoint

Operational flexibility and the narrowbody aircraft

Chris Kjelgaard looks at the fortunes of Brazilian carrier GOL which has made moves to rejuvanate its all narrowbody fleet of aircraft.

Brazilian carrier Gol Linhas Aéreas Inteligentes S.A – ‘GOL’ – has newly provided a timely and useful reminder of the operational flexibility offered by an all-single-aisle fleet comprising models of one aircraft family.

Like many other businesses based in Brazil, GOL continues to be affected by the country’s economic downturn and the appreciation of the US dollar against the Brazilian real.

Twice, earlier this year, GOL revised its 2015 capacity forecast guidance for investors to indicate that, as a result of a slowing Brazilian economy, the airline expected to reduce its overall available seat-kilometre capacity for the year by one per cent compared with 2014.

Together with the fact that GOL actually increased its year-over-year capacity by 1.6 per cent through the first nine months of 2015, Brazil’s continuing economic slowdown has intensified the carrier’s determination to curb capacity now.

GOL advises investors that in the fourth quarter it is reducing capacity by five to seven per cent, in order to meet its 2015 target of a 1 per cent overall capacity cut.

Meanwhile, GOL is making changes to its network to make better use of the airline’s resources, particularly its all-Boeing 737NG fleet, redirecting them to more popular routes.

“The standardised Boeing 737 fleet allows GOL to operate its network in a flexible and dynamic manner, distributing its aircraft through the various routes, regardless of them being short- or long-haul flights, and based on the company's needs,” the airline notes.

GOL announced a raft of network changes on Wednesday (November 11). These include new service frequencies on some routes, and new routes and destinations, as well as frequency reductions on other routes and termination of service to some destinations.

Domestically, on October 25, GOL launched new routes from São Paulo’s downtown Congonhas airport to the coastal cities of Salvador, Porto Seguro, Ilheus and Florianopolis – as the carrier notes, very popular destinations in the summer season (which is the winter season in the Northern hemisphere).

GOL will also introduce new domestic services from Congonhas to Maringa, Londrina and Presidente Prudente.

Meanwhile, for the summer season, GOL is launching non-stop service from Rio de Janeiro’s downtown Santos Dumont Airport to Navegantes and Florianopolis in the south of Brazil.

The carrier will also boost its service to the coastal resort city of Porto Seguro in Bahia state on Brazil’s eastern coast, offering non-stops from Belo Horizonte, Rio de Janeiro and Brasilia.

From the increasingly important domestic and international hub airport of Viracopos, which serves the city of Campinas about 60 miles from São Paulo, GOL will fly to Natal, Fortaleza, Salvador, Maceio and Recife.

These domestic network changes are aimed at capturing opportunities in the tourism sector, according to the airline. But GOL’s most eye-catching network changes are on its international network.

As a result of the success GOL has experienced on the relatively long-haul routes it introduced from Fortaleza and Natal in northeast Brazil to Buenos Aires, GOL is considering launching more non-stop services to the Argentinean capital from other cities in Brazil’s northeast.

Less encouragingly, GOL has decided to operate its existing services to Miami and Orlando only seasonally from 19 February. However, its scheduled service to Punta Cana in the Dominican Republic from Guarulhos, São Paulo’s major international airport, will continue as normal.

GOL has reduced its service to Venezuela’s capital Caracas to one flight a week, no doubt because of the continuing difficulty airlines have in repatriating revenues from Venezuela.

The carrier says it is studying the feasibility of retaining Caracas service.

However, GOL has announced it is planning to add to its network new Latin American destinations such as Cuba’s capital Havana. But the really interesting point about GOL’s route-network announcement is not the fact it is making changes in light of a soft Brazilian economy.

It is that GOL’s network extends all the way from Buenos Aires in the south to Orlando in the north – a distance of just under 4,600 miles – and that the airline operates this entire network with a fleet entirely composed of single-aisle aircraft, all of them 737NGs.

Most of the aircraft GOL operates are Boeing 737-800s. The 737-800 has proved by far the best-selling model in Boeing’s 737NG family, because it offers a potent combination of seat capacity and range.

In keeping its fleet all single-aisle, GOL is like another well-known, fast-growing Latin American carrier, Panama’s Copa Airlines – though Copa operates Embraer 190s in addition to 737NGs.

But the success of these two all-narrowbody carriers, and their continuing efforts to extend and expand their networks, makes one wonder: would GOL and Copa have done so well and managed to keep their operations so flexible if they operated widebodies as well?

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