October 31, 2019 / 12:46 PM / 5 months ago

UPDATE 1-Brazilian airline Gol reports loss, hit by Boeing 737 troubles

(Updates with more details from earnings report)

By Marcelo Rochabrun

SAO PAULO, Oct 31 (Reuters) - Brazil's largest airline, Gol Linhas Aereas Inteligentes, on Thursday reported a 242 million reais ($60.69 million) third-quarter loss, hit by problems affecting its Boeing 737 planes.

Gol flies Boeing 737 planes exclusively, a strategy which can help to reduce costs. But this year it has exposed the company to Boeing's woes, including the worldwide grounding of the Boeing 737 MAX, following two deadly crashes.

The carrier says it expects its seven MAX planes will receive regulatory approval to resume flights in December, based on the guidance it has received from Boeing.

U.S. carriers do not expect to fly the MAX until 2020, according to their schedules.

The Boeing fleet problems have reduced the benefit Gol received following the collapse of rival Avianca Brasil, following a failed bankruptcy restructuring. This has left Brazil's domestic market with just three airlines.

Gol said it had record revenues of 3.7 billion in the quarter but also reduced its profit forecast for the year to 0.90 reais per share, compared to a previous range of being 1.40 and 1.70 reais per share.

In addition to the MAX groundings that began in March, Gol has also had to ground 11 older 737 NG planes because it discovered cracks on what is known as the “pickle fork” which attaches the fuselage to the wings.

Those planes will be grounded for 45 days and the groundings began in early October, Gol said.

The airline said it expects to have a fleet of about 126 planes by the end of the year. About 15% of its current fleet is grounded at the moment.

$1 = 3.9877 reais Reporting by Marcelo Rochabrun; editing by Jason Neely and Jane Merriman

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