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Airlines Post Impressive July 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 the bulk of most airlines’ top lines.
Notably, the Zacks Airline industry has risen 19% so far this year, outperforming 11.1% growth of the broader Zacks Transportation sector and 17.6% 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 #55, which places it in the top 22% of more than 250 Zacks industries.
Let’s take an in-depth look at these companies’ July traffic reports.
Driven by high passenger volumes, Copa Holdings’ revenue passenger miles (a measure of traffic) increased 12.5% in July on a year-over-year basis. To match the demand swell, CPA is increasing its capacity. In July, available seat miles (a measure of capacity) increased 9.9% year over year. With traffic growth outpacing capacity expansion, the load factor (percentage of seats filled by passengers) improved to 89% from 87% in July 2022.
Brazilian carrier, Azul reported year-over-year increases in traffic and capacity for July 2023. AZUL’s consolidated revenue passenger kilometers (a measure of air traffic) and available seat kilometers (a measure of capacity) increased 5.3% and 7.1%, respectively, on a year-over-year basis. Load factor (the percentage of seats filled by passengers) was 83.2% in July 2023.
Internationally, with revenue passenger kilometers (48.1%) outpacing available seat kilometers (47.5%), the load factor increased to 89.1% from 88.7% in July 2022. On the domestic front, the load factor was 81.5%.
Gol Linhas recently reported an impressive year-over-year increase in traffic and capacity for July 2023.
In July, consolidated revenue passenger kilometers (a measure of air traffic) and available seat kilometers (a measure of capacity) increased 6.5% and 3.3%, respectively, on a year-over-year basis. With consolidated passenger traffic growth outpacing capacity expansion, the load factor (the percentage of seats filled by passengers) improved to 83.4% from 80.8% in June 2022. The number of flight departures at GOL in July registered a 10.6% year-over-year jump. Consolidated passengers on board rose 14.5% year over year.
On the domestic front, with revenue passenger kilometers (5%) outpacing available seat kilometers (0.7%), the load factor climbed to 83.5% in July 2023 from 80.1% a year ago.
Domestic departures during the month grew 9.2% on a year-over-year basis. On the domestic front, the number of seats increased 9% in July 2023. International departures surged 53.6% in July 2023 on a year-over-year basis. The number of seats rose 54.3% internationally.
On the domestic front, passengers on board rose 13.6% year over year. Internationally, the metric expanded 40.6% year over year.
European carrier Ryanair also reported impressive traffic numbers for July 2023, driven by upbeat air travel demand.
The number of passengers ferried on RYAAY flights in July was 18.7 million, up 11% year over year. This compared favorably with the June 2023 figure of 17.4 million and the May 2023 figure of 17 million. Owing to upbeat traffic, the load factor was high at 96% in July 2023. The reading was similar to that reported a year ago. RYAAY operated more than 102,000 flights in July 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.
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Airlines Post Impressive July 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 the bulk of most airlines’ top lines.
Notably, the Zacks Airline industry has risen 19% so far this year, outperforming 11.1% growth of the broader Zacks Transportation sector and 17.6% 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 #55, which places it in the top 22% 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 July. RYAAY carries a Zacks Rank #2 (Buy) stock. CPA, GOL and AZUL have a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Let’s take an in-depth look at these companies’ July traffic reports.
Driven by high passenger volumes, Copa Holdings’ revenue passenger miles (a measure of traffic) increased 12.5% in July on a year-over-year basis. To match the demand swell, CPA is increasing its capacity. In July, available seat miles (a measure of capacity) increased 9.9% year over year. With traffic growth outpacing capacity expansion, the load factor (percentage of seats filled by passengers) improved to 89% from 87% in July 2022.
Brazilian carrier, Azul reported year-over-year increases in traffic and capacity for July 2023. AZUL’s consolidated revenue passenger kilometers (a measure of air traffic) and available seat kilometers (a measure of capacity) increased 5.3% and 7.1%, respectively, on a year-over-year basis. Load factor (the percentage of seats filled by passengers) was 83.2% in July 2023.
Internationally, with revenue passenger kilometers (48.1%) outpacing available seat kilometers (47.5%), the load factor increased to 89.1% from 88.7% in July 2022. On the domestic front, the load factor was 81.5%.
Gol Linhas recently reported an impressive year-over-year increase in traffic and capacity for July 2023.
In July, consolidated revenue passenger kilometers (a measure of air traffic) and available seat kilometers (a measure of capacity) increased 6.5% and 3.3%, respectively, on a year-over-year basis. With consolidated passenger traffic growth outpacing capacity expansion, the load factor (the percentage of seats filled by passengers) improved to 83.4% from 80.8% in June 2022. The number of flight departures at GOL in July registered a 10.6% year-over-year jump. Consolidated passengers on board rose 14.5% year over year.
On the domestic front, with revenue passenger kilometers (5%) outpacing available seat kilometers (0.7%), the load factor climbed to 83.5% in July 2023 from 80.1% a year ago.
Domestic departures during the month grew 9.2% on a year-over-year basis. On the domestic front, the number of seats increased 9% in July 2023. International departures surged 53.6% in July 2023 on a year-over-year basis. The number of seats rose 54.3% internationally.
On the domestic front, passengers on board rose 13.6% year over year. Internationally, the metric expanded 40.6% year over year.
European carrier Ryanair also reported impressive traffic numbers for July 2023, driven by upbeat air travel demand.
The number of passengers ferried on RYAAY flights in July was 18.7 million, up 11% year over year. This compared favorably with the June 2023 figure of 17.4 million and the May 2023 figure of 17 million. Owing to upbeat traffic, the load factor was high at 96% in July 2023. The reading was similar to that reported a year ago. RYAAY operated more than 102,000 flights in July 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