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Brazilian Gol Flies 32% More People and Gets Help from Weak Dollar

Gol airline of Brazil Brazilian Airline Gol saw a demand on it route network grow by 32.1% in January over the same period last year (31.4% in the domestic market and 36.9% in the international market). It was the second consecutive month to record a year-on-year upturn.

According to the company, the key factor behind the upturn was the improved economic scenario in Brazil and South America, especially in regard to consumer confidence, and Gol’s strategic positioning in its operational markets.

Gol points out some of the factors they see contributing to the growth: high flight frequency between main airports, rewarding clients who schedule their trips in advance with lower fares, encouraging demand and reducing the number of available seats on flights where advanced booking is rare.

Specifically in regard to the international market, they say that the increase in demand was also due to adjustments to the international route network, which now includes new routes from Brazil to the Caribbean with flights to Aruba and Curacao and the integration of Gol’s and VRG’s reservation systems in January 2009.

Demand grew by 8.5% over December 2009 (5.3% in the domestic market and 35.3% in the international market). The international market growth drivers also included the 19.1% appreciation of the Brazilian real against the dollar over January 2009, which was a key factor that contributed positively to this growth, and the new Caribbean routes, which reached their sales peak in January.

As a result, the Company delivered a total load factor of 77.9% in January 2010 (77.3% in the domestic market and 81.8% in the international market), and the international market was 24.5 percentage points more than the 57.3% recorded in January 2009, and 11.5 percentage points up on the 70.3% registered in December 2009.

  Operating Data            January    January    Ch. %    December    Ch. %
                             2010*      2009*     (YoY)     2009*      (MoM)
  Total System
    ASK (mm) (1)            3,936.7    3,369.1    16.8%     3,702.9     6.3%
    RPK (mm) (2)            3,066.0    2,320.3    32.1%     2,827.0     8.5%
    Load Factor (3)           77.9%      68.9%   +9.0pp       76.3%   +1.5pp
  Domestic Market
    ASK (mm) (1)            3,443.2    2,854.4    20.6%     3,278.6     5.0%
    RPK (mm) (2)            2,662.3    2,025.4    31.4%     2,528.7     5.3%
    Load Factor (3)           77.3%      71.0%   +6.4pp       77.1%   +0.2pp
  International Market
    ASK (mm) (1)              493.5      514.6    -4.1%       424.3    16.3%
    RPK (mm) (2)              403.7      295.0    36.9%       298.3    35.3%
    Load Factor (3)           81.8%      57.3%  +24.5pp       70.3%  +11.5pp

( * ) January 2010 – preliminary figures; Figures from the National Civil Aviation Agency (Anac) for January 2009 and December 2009.

In January 2010, Gol increased its domestic capacity by 20.6%, while demand moved up by 31.4%. This strategy was more effective in the international market, where Gol reduced its capacity by 4.1%, while demand climbed by 36.9%.

Yields maintained their gradual recovery pace, averaging more than R$ 19.00 cents in January.

(1) Available seat kilometers (ASK) is the sum of the products obtained by multiplying the number of seats available on each flight stage by the distance of the average flight stage.

(2) Revenue passenger kilometers (RPK) is the sum of the products obtained by multiplying the number of revenue passengers carried on each flight stage by the average stage distance.

(3) Load factor is the percentage of aircraft seating capacity effectively used, which is calculated by dividing the number of passenger- kilometers flown by the number of seat-kilometers available.

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