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Azul's (AZUL) February Traffic and Load Factor Fall Y/Y

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In the wake of the coronavirus-induced suppressed air-travel demand, Azul S.A.’s (AZUL - Free Report) consolidated traffic for the month of February declined 34.4% year over year to 1,678 million. While traffic in the domestic markets fell 14.2%, international traffic tanked 96.6% year over year.

Consolidated capacity (measured in available seat kilometers) plunged 32.1% from February 2020 levels. With traffic decreasing more than capacity, consolidated load factor (% of seats filled with passengers) contracted 2.7 percentage points to 78.4%. Load factor in domestic declined 2.9 percentage points to 78.6%. However, traffic in the domestic markets was 4.6% higher in February 2021 from the February 2019 figure.

Apart from year-over-year numbers, what is alarming is that the recent spike in coronavirus cases in Brazil worsened the traffic scenario. Notably, Azul’s consolidated traffic in February declined 25.8% from January levels. Consolidated load factor in February dipped to 78.4% from 78.7% in January.

As a result of this bleak scenario, Azul’s shares have performed disappointingly on the bourses over the past month, shedding 22% of its value. Meanwhile, the Zacks Airline industry has witnessed a 12.5% rise in the same time period.

The next few months are also likely to be tough for this Brazilian carrier as stated by its CEO John Rodgerson due to “weak seasonality and the second wave of the pandemic”.

Zacks Rank & Stocks to Consider

Azul currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Transportation sector are Kansas City Southern (KSU - Free Report) , FedEx Corporation (FDX - Free Report)  and Herc Holdings (HRI - Free Report) . Both Kansas City Southern and FedEx carry a Zacks Rank #2 (Buy) while Herc Holdings sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Kansas City Southern, FedEx and Herc Holdings is pegged at 15%, 12% and 31.2%, respectively.

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In-Depth Zacks Research for the Tickers Above

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Kansas City Southern (KSU) - free report >>

FedEx Corporation (FDX) - free report >>

Herc Holdings Inc. (HRI) - free report >>

AZUL SA (AZUL) - free report >>