Gol's losses increase sevenfold in the quarter.

247_Gol is going through a delicate moment. In recent weeks, its stock fell by more than 20% in a single day on the stock exchange after revising its annual profit margin, and the purchase of Webjet, carried out in July, may be blocked by the Administrative Council for Economic Defense (Cade) if the company decides to end the brand of its former competitor. To complete this bad situation, the company owned by the Constantino family presented a terrible result in the second quarter. It increased its losses almost sevenfold compared to the same period last year, from R$ 51,9 million to R$ 358,7 million in losses this year. In the first three months of 2011, Gol made a profit of R$ 110,5 million. It is worth remembering that its competitor Tam, which had also recorded a loss in the second quarter of 2010, managed to reverse the situation and made a profit of R$ 60 million from April to June of this year.

Gol's justification for the poor results is the increased competitiveness in the domestic market and the sharp rise in fuel prices, which soared 27,8%. As a result, expenses increased 19,8% compared to the second quarter of last year. Since these factors are not expected to change in the second half of the year, CEO Constantino de Oliveira Jr. states in the financial report that Gol will implement cost cuts that should have a full impact by the end of 2012. "After the implementation of all ongoing initiatives, a reduction of approximately R$ 650 million in expenses is estimated," wrote the head of Brazil's second-largest airline. At the end of the second quarter, Gol decided to return aircraft with low fuel efficiency, which further increased the period's losses.

With successive drops in the value of its shares on the stock exchange, Gol announced that it will repurchase up to 10% of the outstanding GOLL4 shares. The accumulated devaluation this year exceeds 50%. This Friday, the stock lost more than 1,5%.