(Adds executive’s comments, share performance)
By Alberto Alerigi
SAO PAULO, July 27 (Reuters) - Brazil’s second biggest airline, Gol Linhas Aereas SA, announced on Monday it was cutting the frequency of flights and expected prices to recover, spurring the second-biggest daily jump for its shares this year.
Gol plans to cut capacity in the second half of 2015 by 1.6 percent from a year earlier due to weaker demand, Chief Financial Officer Edmar Lopes said on a conference call, following a similar move by its biggest rival.
Earlier in the day, Gol reported that a pricing gauge known as yield had fallen 17 percent from a year earlier to 20.2 centavos, the worst quarter in at least two years for the metric, which Lopes said had “hit bottom.”
“We’re seeing better times ahead than this 20-centavo yield,” Lopes told analysts on the call.
Gol shares, which slipped 2 percent in opening trade, surged as much as 14 percent after the comments from Lopes, before settling to a 9 percent rise in afternoon trading on the Sao Paulo Stock Exchange.
It was the biggest intraday gain for the stock since Delta announced a $445 million stock and loan agreement expanding its alliance with the Brazilian carrier this month.
Brazil’s biggest airline, the TAM division of regional heavyweight LATAM Airlines Group SA said last week that it would reduce operations in the country by 8-10 percent due to a downturn in Latin America’s largest economy. (Writing and additional reporting by Brad Haynes; Editing by Andrew Hay)