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LATAM Airlines' October Traffic Rises, Load Factor Down
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LATAM Airlines Group S.A. posted mixed traffic numbers for October 2018. In spite of traffic increasing substantially on the back of strong demand for air travel, load factor declined as traffic growth was outweighed by capacity expansion.
Consolidated traffic (measured in revenue passenger miles or RPMs) came in at 10.2 billion, up 1.5% from the year-ago figure. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 7% to 12.4 billion.
However, consolidated load factor (percentage of seats filled by passengers) contracted 4.4 percentage points (pp) to 82.5%. Additionally, passenger count inched up 0.8% to 6,068,000.
At the end of the first 10 months of 2018, LATAM Airlines generated RPMs of 98.4 billion (up 2.4% year over year) and ASMs of 118.4 billion (up 4.7% year over year). Load factor registered a fall of 1.9 pp year over year to 83.1%.
We believe that apart from the traffic report, investors interested in LATAM Airlines are keenly awaiting the release of third-quarter 2018 earnings results, scheduled on Nov 20. We expect escalating oil prices to dent bottom-line growth at LATAM Airlines in the to-be-reported quarter. It is a well-documented fact that the health of airline stocks is inversely related to oil prices. This is because fuel costs are one of the most significant expenses for carriers. Naturally, rise in oil prices leads to increase in operating expenses, which limits bottom-line growth.
Shares of Spirit Airlines, Matson and Norfolk Southern have gained 48%, 18% and 10.7% in the past six months, respectively.
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LATAM Airlines' October Traffic Rises, Load Factor Down
LATAM Airlines Group S.A. posted mixed traffic numbers for October 2018. In spite of traffic increasing substantially on the back of strong demand for air travel, load factor declined as traffic growth was outweighed by capacity expansion.
Consolidated traffic (measured in revenue passenger miles or RPMs) came in at 10.2 billion, up 1.5% from the year-ago figure. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 7% to 12.4 billion.
However, consolidated load factor (percentage of seats filled by passengers) contracted 4.4 percentage points (pp) to 82.5%. Additionally, passenger count inched up 0.8% to 6,068,000.
At the end of the first 10 months of 2018, LATAM Airlines generated RPMs of 98.4 billion (up 2.4% year over year) and ASMs of 118.4 billion (up 4.7% year over year). Load factor registered a fall of 1.9 pp year over year to 83.1%.
LATAM Airlines Group S.A. Price
LATAM Airlines Group S.A. Price | LATAM Airlines Group S.A. Quote
We believe that apart from the traffic report, investors interested in LATAM Airlines are keenly awaiting the release of third-quarter 2018 earnings results, scheduled on Nov 20. We expect escalating oil prices to dent bottom-line growth at LATAM Airlines in the to-be-reported quarter. It is a well-documented fact that the health of airline stocks is inversely related to oil prices. This is because fuel costs are one of the most significant expenses for carriers. Naturally, rise in oil prices leads to increase in operating expenses, which limits bottom-line growth.
Zacks Rank & Stocks to Consider
LATAM Airlines carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader Transportation sector are Spirit Airlines, Inc. (SAVE - Free Report) , Matson, Inc. (MATX - Free Report) and Norfolk Southern Corporation (NSC - Free Report) . While Matson and Norfolk Southern carry a Zacks Rank #2 (Buy), Spirit Airlines sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Spirit Airlines, Matson and Norfolk Southern have gained 48%, 18% and 10.7% in the past six months, respectively.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>