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Copa Holdings April Load Factor Falls, Traffic Increases

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Copa Holdings, S.A.’s (CPA - Free Report) increase in air traffic for April can be attributed to solid demand for air travel, courtesy of the improving Latin American economy.

About the Report

Traffic, measured in revenue passenger miles (RPMs), came in at 1.71 billion up 11.9% from the year-ago figure. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) improved 12.1% to 2.09 billion.  

With capacity expansion outweighing traffic growth, load factor (% of seats filled by passengers) declined in the month. The reduction in this key metric was to the tune of 10 basis points (bps) to 81.9%. However, on a year-to-date basis, load factor improved 110 bps to 82.7% as capacity expansion (9.3%) was outpaced by 10.8% traffic growth.

We remind investors that strong demand for air travel had contributed to fellow Latin American carrier, Gol Linhas Aereas Inteligentes S.A.’s , April traffic figures as well.

Robust Demand Behind Copa Holdings' Impressive Q1

Impressive demand for air travel also aided this leading Latin American carrier’s first-quarter 2018 results, revealed last week. Copa Holdings’ earnings per share of $3.22 surpassed the Zacks Consensus Estimate of $2.78. The bottom-line figure surged 32.5% on a year-over-year basis. Quarterly revenues too increased 15.9% year over year to $715 million and outpaced the consensus mark of $692 million.

The year-over-year improvement in the top line was primarily owing to 16.3% growth in passenger revenues. While passenger unit revenue per available seat mile (PRASM) climbed 7.2%, yield per passenger mile improved 5.3%. Passenger traffic (on a consolidated basis) rose 10.4% and capacity was up 8.4% in first-quarter 2018. Load factor expanded 150 basis points to 83% as traffic growth outweighed capacity increase.

Additionally, unit revenue per available seat mile (RASM) improved 7.2%. This apart, operating cost per available seat mile (CASM), excluding fuel, increased 1.1% in the reported quarter. The metric, including fuel costs, was up 5.6%.

Zacks Rank & Key Picks

Copa Holdings carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Transportation sector are SkyWest, Inc. (SKYW - Free Report) and Expeditors International of Washington, Inc. (EXPD - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest and Expeditors have rallied more than 12% and 20%, respectively, in the last six months.

 

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