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Copa Holdings (CPA) Posts Impressive Growth in July Traffic
Latin American carrier Copa Holdings SA (CPA - Free Report) posted a rise in air traffic for the month of July this year. Traffic – measured in revenue passenger miles (RPMs) – came in at 1.63 billion, up 9.8% from 1.49 billion recorded in Jul 2015.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) increased 1.1% to 1.9 billion. As the increase in traffic outpaced growth in capacity, load factor (% of seats filled by passengers) climbed 690 basis points (bps) to 86.1% in the month.
For the first seven months of 2016, Copa Holdings generated RPMs of 10.1 billion (up 5.6% year over year) and ASMs of 12.8 billion (up 1.0%). Load factor registered a growth of 350 bps year over year to 79.0% during the period.
Although traffic growth has been impressive, like other Latin American carriers including GOL Linhas Aereas Inteligentes S.A. , the company continues to suffer because of weak economic conditions in Brazil and strengthening of the U.S. dollar. However, the ongoing Olympic games in Brazil may boost third-quarter revenues for Copa Holdings.
COPA HLDGS SA-A Price
COPA HLDGS SA-A Price | COPA HLDGS SA-A Quote
Q2 Performance
In the second quarter of 2016, the top line at Copa Holdings contracted 8.2% on a year-over-year basis while operating income declined 30.5%. Operating revenue per available seat mile (RASM: a key measure of unit revenue) decreased 7.7% to 9.3 cents. Although low fuel prices helped to manage costs, margins were affected by losses from fuel hedges. The company also reported 86.5% consolidated on-time performance and a completion factor of 99.8%.
Several airline companies such as Southwest Airlines Co. (LUV - Free Report) and Delta Air Lines Inc.(DAL - Free Report) have been facing challenges on the revenue front on account of lower demand. Slow economic growth coupled with issues such as terror attacks have impacted the performance of major airlines.
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