Fitch predicts record results for GOL and TAM

Fitch Ratings said that despite the Brazilian civil aviation crisis, it expects GOL Linhas Aereas Inteligente SA (BB+/stable) and TAM Linhas Aereas SA (BB/stable) will post their best-ever results for the full year 2006 after a slight deterioration of profitability during the fourth quarter.

The agency said that TAM and GOL have benefited from their position as dominant companies in the national airline sector are the only ones with a truly integrated national network, adding that they enjoy competitive cost structures even compared to international standard and present a solid financial profile and significant cash resources, mitigating short-term risks and sector turbulence.

Fitch also predicted that the recent developments in the Brazilian civil aviation crisis and its adverse effects will encourage important changes in the sector because they have highlighted the need for more government infrastructure investments and continued efficiency improvements on behalf of the operating companies.

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