Gol Linhas (NYSE:GOL) sees full year capacity growth falling in a range of 0% to -2%.
The airline company also expects to see a load factor of 77% to 79%, a non-fuel cost per available kilometer of $0.14 real, EBITDA margin of 12% to 14% and operating margin of 7% to 9%.
Gol Linhas statement: "GOL believes that its leadership in rational capacity and yield management, combined with its lowest cost operations and a highest quality passenger service, will enable the company to increase its competitive advantages and effectively manage passenger demand."
U.S.-traded Brazilian stocks are lower after the country's Supreme Court orders new corruption investigations for eight ministers and dozens more top politicians in a sweeping decision that affects almost one third of Pres. Temer's Cabinet.
In total, 108 people will be investigated following the ruling, which itself was the product of 74 probes involving plea bargain deals and testimony from former and current executives with the Odebrecht construction company.
Volaris (VLRS +6.7%), Gol Linhas (GOL +9.7%), Copa Holdings (CPA +2.6%), Avianca Holdings (AVH +2%), China Eastern (CEA +7.4%), China Southern (ZNH +7%) and LATAM Airlines (LFL +7.5%) are all higher on some investor enthusiasm that the sector was oversold.
The rally coincides with an airline industry conference at which several carriers have updated guidance, including restrained capacity growth.
U.S. airlines Hawaiian Holdings (HA +3.7%) and Allegiant Travel (ALGT +3.5%) are also notably higher on the day.
Global airline traffic hit a five-year peak in January, according to tracking from IATA.
Revenue passenger kilometers increased 9.6% Y/Y off an 8.0% jump in capacity. Global load factor improved 120 bps to 80.2%.
Traffic was up 14.3% in Asia Pacific and 13.5% in the Middle East to pace the gains. All regions showed an improvement in load factor except for North America.
"2017 is off to a very strong start, with demand at levels not seen since 2011. This is supported by the upturn in the global economic cycle and a return to a more normal environment after the terrorism and political ‘shock’ events seen in early 2016," notes IATA Director General/CEO Alexandre de Juniac.