August 12, 2008

GOL Reports Net Revenues of R$1.5bn for 2Q08

SAO PAULO, Brazil, Aug. 12 /PRNewswire-FirstCall/ -- GOL Linhas Aereas Inteligentes S.A. , the parent company of Brazilian airlines GOL Transportes Aereos S.A. ("GTA") and VRG Linhas Aereas S.A. ("VRG"), today announced financial results for the second quarter of 2008 (2Q08). The following financial and operating information, unless otherwise indicated, is presented pursuant to US GAAP and in Brazilian Reais (R$) and comparisons refer to the second quarter of 2007 (2Q07). Consolidated results for the quarter include those of VRG since April 9, 2007, making comparisons of 2Q08 and 2Q07 less relevant as a result. Additionally, financial statements in BR GAAP are made available at the end of this release. Quarterly information does not include the changes in accounting practices provided by Law No. 11,638, as permitted by the Brazilian Securities and Exchange Commission (CVM) in this period of transition.


-- Net revenues reached R$1.5bn, representing growth of 27.2% compared to the same period last year. The Company transported 7.1mm passengers in the quarter, representing growth of 14.3% over 2Q07. Ancillary revenues (cargo and other) increased 18.3% over 2Q07 to R$124.8mm.

-- Consolidated net loss for the quarter was R$171.7mm (US$104.1mm). Consolidated net loss per share (EPS) was R$0.85; net loss per ADS was US$0.52.

-- Consolidated operating costs per ASK (CASK) increased 15.4% from 14.33 cents (R$) in 2Q07 to 16.53 cents (R$) in 2Q08. Non-fuel CASK increased 12.1% to 9.66 cents (R$) due to lower aircraft utilization caused by recent ANAC regulations that established minimum ground times between landing and takeoff at all of Brazil's airports, extraordinary expenses related to the shut down of intercontinental destinations including aircraft return expenses (during 2Q08, VRG ceased operations to Mexico and Madrid), and an increase in salaries, wages and benefits, sales and marketing and depreciation.

-- At June 30, the Company's total liquidity was R$2.8bn, comprised of: cash, cash equivalents and short-term investments of R$737.7mm, accounts receivable of R$339.9mm, R$485mm in unused working capital credit lines, R$554.6mm in deposits with lessors and R$729.7mm deposited with Boeing as advances for aircraft acquisitions.

-- Consolidated domestic RPKs increased 10.4% and ASKs 3.8%, versus 1Q08. Consolidated international revenue passenger kilometers (RPKs) decreased 27.2% and ASKs 23.1% versus 1Q08.

-- Consolidated RPKs increased 20.1% from 5,741mm in 2Q07 to 6,897mm in 2Q08 and ASKs increased 22.8% from 8,692mm in 2Q07 to 10,677mm in 2Q08. Consolidated average load factor decreased 1.4 percentage points versus 2Q07 to 64.6%. GTA's RPKs increased 3.0% from 4,959mm in 2Q07 to 5,109mm in 2Q08 and ASKs increased 6.3% from 7,215mm in 2Q07 to 7,666mm in 2Q08. GTA's average load factor decreased 2.1 percentage points to 66.6%. VRG's RPKs increased 128.6% from 782mm in 2Q07 to 1,788mm in 2Q08 and ASKs increased 103.9% from 1,477mm in 2Q07 to 3,011mm in 2Q08. VRG's average load factor was 59.4%, an increase of 6.5 percentage points. Consolidated break-even load-factor was 77.8%, up 5.7 percentage points over 2Q07.

-- Consolidated passenger yields increased 7.7% to R$19.43 cents (domestic yields increased 11.1% and international yields decreased 8.7% versus 2Q07). RASK increased 3.5% over 2Q07 to 13.72 cents (R$). Average fares were R$196.

-- The domestic market grew 1.9% over 1Q08, despite the fact that the second quarter is historically a weak period of demand (seasonally) for the industry, and 11.0% compared to 2Q07, 2.1 times the estimated Brazilian GDP growth.

-- GTA and VRG now offer over 740 daily flights to 59 different destinations in Brazil and South America, the most of any airline group. In 2Q08, GTA added 9 new daily flight frequencies and served 56 destinations. VRG added 21 new daily flight frequencies, serving 18 destinations. The Company's low-cost operating structure permits flights to medium-sized cities with lower traffic volumes, allowing GOL to serve various destinations outside of Brazil's main economic centers.

-- In line with its fleet renewal plan, the Company received two 737-800 NG and removed seven 737-300s and three 767-300 from the operating fleet during the quarter, resulting in a net reduction of five aircraft in the narrow body operating fleet. The Company plans to end 2008 with a consolidated fleet of 104 aircraft, comprised of 737-800 and 737-700 aircraft.

-- In June, GOL ranked second in sustainability consulting group Management & Excellence (M&E)'s Latin American corporate governance study ("The Best Governed Major Latin Corporations 2008"). According to the study, conducted in partnership with LatinFinance magazine, GOL employs 90.2% of the required positive corporate governance practices included in the analysis, compared to an average score of 62.34% by the 50 companies included in the research. GOL was the only airline named in the report.

-- On June 26, CADE (Brazilian Antitrust Authority) approved GOL's acquisition of VRG (effected on April 9, 2007) with no restrictions. On July 30, GOL requested ANAC approval of a proposed organizational reorganization of its subsidiaries, GTA and VRG, merging them into one airline. Under the proposed reorganization, the airline will maintain the "GOL" and "VARIG" brands and respect all VRG and GTA's current rights and obligations. The reorganization will not affect GOL's public shareholders.

-- In 2Q08, VRG finalized interline agreements with Copa Airlines and American Airlines. Passengers traveling on these airlines are now able to purchase tickets for all routes served by VRG in Brazil and South America.

-- On August 6, the Company's Board of Directors approved the suspension of dividend payments for the remainder of the 2008 fiscal year, but guaranteed a minimum payment of 25% of the year's consolidated net income. The Company ended the quarter with 26.5% of its shares floating in the market. GOL's shares presented average daily trading volumes of US$18.3mm (R$30.3mm) during 2Q08.

    IR Contact    Email: [email protected]    Tel: +55 (11) 3169-6800     IR Website:     2Q08 Earnings Results Webcast    Date: Tuesday, August 12, 2008          English         11:00 a.m. US EDT         12:00 p.m. Brasilia Time         Phone: +1 (973) 935-8893         Replay: +1 (706) 645-9291         Code: 54689682          Portuguese         12:30 a.m. US EDT         1:30 p.m. Brasilia Time         Phone: +55 (11) 2188-0188         Replay: +55 (11) 2188-0188         Code: GOL  

GOL Linhas Aereas Inteligentes S.A.

CONTACT: IR Contact, +55-11-3169-6800, [email protected]

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