GOL’s Route Network Registers 10% Traffic Growth

Record demand in GOL’s route network for the month of June,

with a 10.0% year-over-year growth

São Paulo, July 7, 2010 – GOL Linhas Aéreas Inteligentes S.A. (NYSE: GOL and BM&FBOVESPA: GOLL4), the largest low-cost and low-fare airline in Latin America, has registered record demand for the month of June since it began operations in 2001.

Demand

In June, the Company registered a 10.0% year-over-year growth in demand in its route network, with the domestic market growing by 8.3%. Compared to May 2010, total system demand increased by 4.4%, while considering the daily average of RPKs (which adjusts the difference between the number of calendar days in each month: 30 in June and 31 in May), growth was even higher at 7.9%. The continuous growth in demand is mainly due to the: (i) combined effect of the improved economic scenario in Brazil and South America; (ii) GOL’s competitive advantages, especially its low-cost structure with a strategic focus; (iii) short-haul flights (around 95% of GOL’s flights are up to 3 hours in duration); (iv) optimization of the international route network; and (v) resumption of flights to the South Cone region, which were adversely affected by the H1N1 flu cases in June 2009.

( * ) June 2010 - preliminary figures; June 2009 and May 2010 - figures from the National Civil Aviation Agency (Anac).

Demand also grew in GOL’s international route network, up by 24.5% on May 2009 and 15.8% on May 2010, mainly reflecting the continuous growth of international air traffic in Latin America, according to data published by the International Air Transport Association (IATA), and the heavy demand for GOL flights to Argentina, Paraguay and Colombia. Moreover, demand for the South Cone region was driven by the demand restrained by the H1N1 flu cases, which adversely affected air traffic in the region exactly during its high demand season (June and July). The inauguration of new flights to the Caribbean - currently served by six destinations: Aruba, Barbados, Curaçao, Panama, Punta Cana and Saint Maarten (inaugurated in June) - also contributed to the growth of international network demand.

Capacity

With the strong increase of demand since the beginning of the second half of 2009, total route network capacity grew by 13.3%. GOL’s domestic capacity also increased by 14.9%, thanks to high productivity, with an aircraft utilization rate of around 13.0 block hours per day in June, compared to 11.9 block hours per day in June 2009, and the increased demand caused by the better economic scenario in Brazil. The higher utilization rate, which dilutes unit costs, is preparing GOL’s route network, while stimulating demand for leisure travelers for the second half of the year, when demand is higher than in the first half. 

Total load factor decreased by 1.9 p.p. from June 2009 but grew 3.5 p.p. over May 2010 to reach 61.9%. As mentioned earlier, this was due to the repositioning of the route network, with a higher utilization rate. The yield for the month of June was around 20.00 cents (R$), about 5% above the same period last year and within the Company’s financial perspectives.

( * ) June 2010 - preliminary figures; June 2009 and May 2010 - figures from the National Civil Aviation Agency (Anac).

(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.