Brazilian Airline Gol Celebrates 7th Birthday Flying 7 Million

Brazilian Airline Gol Brazil Airline Gol, which also owns Varig Airline, has released passenger statistics for the month of October.  According to these data, consolidated domestic passenger traffic (RPK) for October increased 47% and capacity (ASK) increased 48% year-over-year.

Domestic consolidated load factor for the month was 71%, and in the international market consolidated load factor was 62%.  Gol's total consolidated load factor for the month of October was 69%.  Average fares increased 6% versus October 2006.

GTA's domestic passenger traffic (RPK) for October was 1,665 mm and capacity (ASK) was 2,295 mm. International passenger traffic (RPK) was 169 mm and capacity (ASK) was 277 mm.  Varig's domestic passenger traffic (RPK) for October was 108 mm and capacity (ASK) was 218 mm. International passenger traffic (RPK) was 227 mm and capacity (ASK) was 361 mm.

Consolidated                     October        October        Change
Operating Data                    2007 *         2006 *          (%)

Total System
ASK (mm) (1)                     3,150.9        1,905.3          65.4 %
RPK (mm) (2)                     2,168.8        1,333.2          62.7 %
Load Factor (3)                     68.8 %         70.0 %        -1.2 p.p.
Domestic Market
ASK (mm) (1)                     2,512.9        1,703.2          47.5 %
RPK (mm) (2)                     1,772.2        1,203.2          47.3 %
Load Factor (3)                     70.5 %         70.6 %        -0.1 p.p.
International Market
ASK (mm) (1)                       638.0          202.1         215.7 %
RPK (mm) (2)                       396.6          130.0         205.1 %
Load Factor (3)                     62.2 %         64.3 %        -2.1 p.p.
(*)  October 2007 – preliminary data; final data for October 2006.

(1) Available seat kilometers represents the aircraft seating capacity multiplied by the number of kilometers the seats are flown.
(2) Revenue passenger kilometers represents the numbers of kilometers flown by revenue passengers.
(3) Load factor represents the percentage of aircraft seating capacity that is actually utilized (calculated by dividing revenue passenger kilometers by available seat kilometers).

70 Million Passengers

Gol also announced that it transported 70 million passengers, achieving the milestone two months shy of its seventh anniversary. The Company began operations on January 15, 2001, with the aim of providing air transportation at accessible fares.

According to the company their fare philosophy has changed the face of Brazil's aviation industry: average fares for domestic flights have fallen by 29% percent and approximately seven million passengers traveled by plane for the first time with Gol.

"Transporting 70 million people in less than seven years is a significant accomplishment for a young airline. Our business model allows us to offer tickets at competitive fares, increasing the accessibility of air transportation and setting new performance records in the Brazilian aviation industry," says Tarcí­sio Gargioni, vice president of Marketing and Services at Gol.

When launching its first flight, Gol served seven destinations and had a fleet of only six aircraft. Today, the Company operates 77 Boeing 737 aircraft to 58 destinations, including eight international cities (within South America).

On November 21, Gol will begin operations to its newest destination: São José dos Campos, in São Paulo state. Daily flights will connect the Vale do Paraí­ba area, one of Brazil's most important economic regions, to all destinations served by Gol.

Net Revenues

On November 7, Gol also announced financial results for the third quarter of 2007 (3Q07).

– Consolidated net income for the quarter was R$ 45.5 mm (US$ 24.9 mm), representing a 3.5% net margin. Earnings per share (EPS) was R$ 0.22; earnings per ADS was US$ 0.12.

– Net revenues reached R$ 1.3 billion, representing growth of 20.4% compared to the same period last year.

– Consolidated operating costs per ASK (CASK) decreased 12.8% from 16.31 cents (R$) in 3Q06 to 14.23 cents (R$) in 3Q07.  Non-fuel CASK decreased 7.9% to 8.7 cents (R$).

– Consolidated RPKs increased 33.2% from 4,107 mm in 3Q06 to 5,470 mm in 3Q07 and ASKs increased 71.6% from 5,210 mm in 3Q06 to 8,941 mm in 3Q07. Consolidated average load factor decreased 17.6 percentage points to 61.2%.

– GTA's average market share of domestic and international regular air transportation in 3Q07 was 39.1% and 12.7%, respectively.  Varig's average market share of domestic and international regular air transportation in 3Q07 was 2.5% and 13.3%, respectively.

– Consolidated average passenger yields decreased 11.7% to 21.73 cents (R$), resulting in a 29.9% decrease in RASK versus 3Q06.  Average fares increased 1.1% from R$ 217.9 to R$ 220.3.

– In 3Q07, Gol added 14 new daily flight frequencies and served 58
destinations. Varig added four new daily flight frequencies to Paris and Rome, serving 20 different destinations.

– Five Boeing 737-800 NG aircraft were added to the Gol fleet during
3Q07, increasing the total fleet to 74 aircraft. One Boeing 767-300
aircraft was added to the Varig fleet during 3Q07.

– A net quarterly interest on shareholders' equity and dividend payment was approved on the amount of R$ 70.8 mm.

Back in Buenos Aires

Varig will begin operating regular flights to Buenos Aires, Argentina, on November 13. By year end, Varig should offer 98 weekly connections between Argentina's capital and several cities in Brazil.

Beginning November 13, the Company will offer 28 weekly connections between Buenos Aires and the cities of São Paulo and Rio de Janeiro. By December 3, Varig will offer an additional 42 weekly connections between the three cities.

Beginning December 10, the Company will launch an additional 28 weekly flights connecting Buenos Aires to Brasí­lia, Distrito Federal; Florianópolis, Santa Catarina; Porto Alegre, Rio Grande do Sul; and Recife, Pernambuco.

"There is currently considerable commercial exchange between Brazil and Argentina. In addition to meeting the demand among business travelers for service between the two countries, operating flights to Buenos Aires will also provide more options for leisure travelers," says Lincoln Amano, Varig's commercial director.

Varig currently offers international service to Bogota and Caracas in South America, and Frankfurt, London, Paris and Rome in Europe.

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