GOL Announces that Passenger Traffic Increases by 12.2% in July with Yield of Close to 21.00 cents (R$)

SAO PAULO, Aug. 3 /PRNewswire-FirstCall/ -- GOL Linhas Aereas Inteligentes S.A. (NYSE: GOL and BM&FBOVESPA: GOLL4), (S&P/Fitch: BB-/BB-, Moody's: Ba3), the largest low-cost and low-fare airline in Latin America, recorded its highest July demand figure since it began operations in 2001, while the international load factor reached its highest level since the acquisition of VRG.

Demand

In July 2010, demand on GOL's route network moved up by 12.2% year-on-year and by 22.7% over the previous month.

In line with the continuing upward trend, demand on the domestic market grew by 5.4% over July 2009 and 19.6% over June 2010, chiefly due to: (i) the combined effect of the improved economic scenario in Brazil and South America; (ii) the seasonally favorable period for the industry thanks to the school vacations in July; (iii) dynamic management of the new fare categories, which expanded the range of alternatives and benefited leisure travelers, while at the same time focusing on strengthening yields; (iv) increased productivity, with an aircraft utilization rate of around 13 block hours per day, versus around 12 block hours in July 2009; (v) GOL's competitive advantages, with the most regular and frequent flights between Brazil's major airports; and (vi) the progressively lower cost structure, following the conclusion of the fleet renewal program involving the replacement of existing aircraft with Boeing 737-800/700 NGs.

Demand on GOL's international route network increased by a hefty 84.4% over July 2009 and 45.8% over the previous month, primarily due to: (i) the continuous growth of international air traffic in Latin America, especially heavy demand for GOL flights to Argentina, Chile and Uruguay; (ii) the resumption of demand in the Southern Cone region, which had been jeopardized by the impact of the H1N1 flu outbreak on air traffic in July 2009; (iii) the inauguration of new flights to Aruba, Barbados, Curacao, Panama, Punta Cana and Saint Maarten, in the Caribbean region; and (iv) the appreciation of the Real over the U.S. Dollar.

Supply

In line with its strategy of adjusting its route network to a scenario of continuous demand growth, especially in regard to expectations for 2H10, GOL recorded year-on-year capacity growth of 16.3% on its total route network in July 2010 (15.3% on the domestic market and 23.8% on the international market), driven by the combined effect of: (i) high productivity, with an aircraft utilization rate of around 13.0 block hours per day, versus close to 12 block hours per day in July 2009; (ii) renewal of the fleet, replacing Boeing 737-300 aircrafts with the larger 737-700/800s; and (iii) the maintenance of a longer average stage-length, thanks to the higher concentration of flights on South-Northeast routes due to their tourist appeal.

SOURCE GOL Linhas Aereas Inteligentes S.A.