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GOL - Chapter 11 Filing In a Bid to Ensure Financial Sustainability

Founder & Managing Director, AIR Control Tower, AIR Control Tower

Neil Glynn

Founder & Managing Director, AIR Control Tower

AIR Control Tower

AIR Control Tower is an independent research and analysis platform. Its mission is to provide impactful insight and analysis across the global airline industry at a company and market level via detailed financial models to aid decision making for key stake holders at a time when risks have seldom, if ever, been higher and the global sector grapples with the imperative of funding de-carbonisation. Unique analysis forecasting global carrier-level earnings/cash flows, and restructuring/de-leveraging prospects, is designed to dynamically assess the health of the industry, predict surprises and identify potential requirements for third party support.

Insights on the global airline industry

Equity Bottom-Up

Gol Linhas Aereas Intel-Adr / Equity Bottom-Up

<ul>
<li>GOL recently filed for CH11 bankruptcy protection as it was due to run out of readily available cash in mid-February. We assess the ramifications.</li>
<li>We highlight that GOL may need to reduce aircraft ownership/financing costs by a third to achieve PBT margins of 5%+; difficult in a strong aircraft leasing market.</li>
<li>We see the risk GOL loses scale. However, long-term, an increasingly competitive GOL is good for its parent Abra Group, and sister company Avianca.</li>
</ul>


GOL recently filed for CH11 bankruptcy protection as it was due to run out of readily available cash in mid-February. We assess the ramifications.
We highlight that GOL may need to reduce aircraft ownership/financing costs by a third to achieve PBT margins of 5%+; difficult in a strong aircraft leasing market.
We see the risk GOL loses scale. However, long-term, an increasingly competitive GOL is good for its parent Abra Group, and sister company Avianca.


GOL - Ramifications of GOL's Chapter 11 Filing