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Airlines Post Impressive June Traffic Numbers: An Analysis
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The Zacks Airline industry has been benefiting from buoyant air travel demand, following the easing of COVID-19 travel restrictions and the reopening of the global economy. The industry is witnessing a solid recovery in demand for domestic as well as international flights. People are again booking flights, thereby leading to higher passenger revenues, which contribute to the bulk of most airlines’ top lines.
Notably, the Zacks Airline industry has risen 37.7% so far this year, outperforming 12.6% growth of the broader Zacks Transportation sector and the 17.4% rise of the Zacks S&P 500 composite.
Image Source: Zacks Investment Research
The buoyancy in the industry is further confirmed by its Zacks Industry Rank #45, which places it in the top 18% of more than 250 Zacks industries.
Driven by the buoyant scenario with respect to air traffic, Copa Holdings(CPA - Free Report) , Azul S.A. (AZUL - Free Report) , Gol Linhas Aereas Inteligentes and Ryanair Holdings (RYAAY - Free Report) reported impressive traffic numbers for May. CPA currently sports a Zacks Rank #1 (Strong Buy), while RYAAY has a Zacks Rank #2 (Buy) stock. GOL and AZUL carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Let’s take an in-depth look at these companies’ June traffic reports.
Driven by high passenger volumes, Copa Holdings’ revenue passenger miles (a measure of traffic) rose 14.9% in June on a year-over-year basis. To match the demand swell, CPA is increasing its capacity. In June, available seat miles (a measure of capacity) increased 10.7% year over year. With traffic growth outpacing capacity expansion, the load factor (percentage of seats filled by passengers) improved to 86.8% from 83.7% in June 2022.
Brazilian carrier, Azul, reported a double-digit year-over-year increase in traffic and capacity for June 2023. AZUL’s consolidated revenue passenger kilometers (a measure of air traffic) and available seat kilometers (a measure of capacity) increased 15% and 12.6%, respectively, on a year-over-year basis. With consolidated passenger traffic growth outpacing capacity expansion, the load factor improved to 80.9% from 79.3% in June 2022.
On the domestic front, with revenue passenger kilometers (2%) outpacing available seat kilometers (0.6%), the load factor increased to 79.1% from 78% in June 2022. Internationally, revenue passenger kilometers and available seat kilometers increased 92.8% and 94.2%, respectively, on a year-over-year basis. The load factor was 87.3%.
Gol Linhas also reported a double-digit year-over-year increase in traffic and capacity for June 2023. In June, consolidated revenue passenger kilometers and available seat kilometers increased 14% and 15.4%, respectively, on a year-over-year basis. The load factor was 75.7%. The number of flight departures at GOL in June registered a 20.8% year-over-year increase. Consolidated passengers on board rose 21% year over year.
On the domestic front, with revenue passenger kilometers (12.9%) outpacing available seat kilometers (12.4%), the load factor increased to 76% from 75.7% in June 2023.
Domestic departures, accounting for more than 95% of the total departures during the month, grew 19.4% on a year-over-year basis. On the domestic front, the number of seats increased 20.3% in June. International departures surged 62.1% in June on a year-over-year basis. The number of seats surged 65.1% internationally.
On the domestic front, passengers on board rose 20.6% year over year. Internationally, the metric increased 31.2% year over year.
European carrier Ryanair also reported impressive traffic numbers for June 2023, driven by upbeat air-travel demand. The number of passengers ferried on RYAAY flights in June was 17.4 million. This compared favorably with the May 2023 figure of 17 million and 15.9 million in June 2022. Owing to upbeat traffic, the load factor was high at 95% in June 2023. The reading was similar to that reported a year ago. RYAAY operated more than 96,250 flights in June 2023.
Year-to-date Price Performance
In fact, air traffic has been buoyant throughout the year leading to significant year-to-date price appreciation in the above stocks.
Image Source: Zacks Investment Research
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Airlines Post Impressive June Traffic Numbers: An Analysis
The Zacks Airline industry has been benefiting from buoyant air travel demand, following the easing of COVID-19 travel restrictions and the reopening of the global economy. The industry is witnessing a solid recovery in demand for domestic as well as international flights. People are again booking flights, thereby leading to higher passenger revenues, which contribute to the bulk of most airlines’ top lines.
Notably, the Zacks Airline industry has risen 37.7% so far this year, outperforming 12.6% growth of the broader Zacks Transportation sector and the 17.4% rise of the Zacks S&P 500 composite.
Image Source: Zacks Investment Research
The buoyancy in the industry is further confirmed by its Zacks Industry Rank #45, which places it in the top 18% of more than 250 Zacks industries.
Driven by the buoyant scenario with respect to air traffic, Copa Holdings(CPA - Free Report) , Azul S.A. (AZUL - Free Report) , Gol Linhas Aereas Inteligentes and Ryanair Holdings (RYAAY - Free Report) reported impressive traffic numbers for May. CPA currently sports a Zacks Rank #1 (Strong Buy), while RYAAY has a Zacks Rank #2 (Buy) stock. GOL and AZUL carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Let’s take an in-depth look at these companies’ June traffic reports.
Driven by high passenger volumes, Copa Holdings’ revenue passenger miles (a measure of traffic) rose 14.9% in June on a year-over-year basis. To match the demand swell, CPA is increasing its capacity. In June, available seat miles (a measure of capacity) increased 10.7% year over year. With traffic growth outpacing capacity expansion, the load factor (percentage of seats filled by passengers) improved to 86.8% from 83.7% in June 2022.
Brazilian carrier, Azul, reported a double-digit year-over-year increase in traffic and capacity for June 2023. AZUL’s consolidated revenue passenger kilometers (a measure of air traffic) and available seat kilometers (a measure of capacity) increased 15% and 12.6%, respectively, on a year-over-year basis. With consolidated passenger traffic growth outpacing capacity expansion, the load factor improved to 80.9% from 79.3% in June 2022.
On the domestic front, with revenue passenger kilometers (2%) outpacing available seat kilometers (0.6%), the load factor increased to 79.1% from 78% in June 2022. Internationally, revenue passenger kilometers and available seat kilometers increased 92.8% and 94.2%, respectively, on a year-over-year basis. The load factor was 87.3%.
Gol Linhas also reported a double-digit year-over-year increase in traffic and capacity for June 2023. In June, consolidated revenue passenger kilometers and available seat kilometers increased 14% and 15.4%, respectively, on a year-over-year basis. The load factor was 75.7%. The number of flight departures at GOL in June registered a 20.8% year-over-year increase. Consolidated passengers on board rose 21% year over year.
On the domestic front, with revenue passenger kilometers (12.9%) outpacing available seat kilometers (12.4%), the load factor increased to 76% from 75.7% in June 2023.
Domestic departures, accounting for more than 95% of the total departures during the month, grew 19.4% on a year-over-year basis. On the domestic front, the number of seats increased 20.3% in June. International departures surged 62.1% in June on a year-over-year basis. The number of seats surged 65.1% internationally.
On the domestic front, passengers on board rose 20.6% year over year. Internationally, the metric increased 31.2% year over year.
European carrier Ryanair also reported impressive traffic numbers for June 2023, driven by upbeat air-travel demand. The number of passengers ferried on RYAAY flights in June was 17.4 million. This compared favorably with the May 2023 figure of 17 million and 15.9 million in June 2022. Owing to upbeat traffic, the load factor was high at 95% in June 2023. The reading was similar to that reported a year ago. RYAAY operated more than 96,250 flights in June 2023.
Year-to-date Price Performance
In fact, air traffic has been buoyant throughout the year leading to significant year-to-date price appreciation in the above stocks.
Image Source: Zacks Investment Research