Copa Holdings, S.A. (CPA - Free Report) reported disappointing traffic figures for August, following which its shares declined 2.9% to close Friday’s (Sep 13) trading session at $98.59.
Consolidated traffic, measured in revenue passenger miles (RPMs), slipped 3% to 1.81 billion in the month. On a year-over-year basis, consolidated capacity (measured in available seat miles/ASMs) decreased 5% year over year to 2.13 billion.
Although load factor (% of seats filled by passengers) improved 180 basis points (bps) as traffic decline was less than the decrease in capacity, this alone does not justify healthy traffic results. With the prolonged grounding of the Boeing 737 MAX aircraft, the carrier has been battling low capacity issues. This, in turn, seems to be taking a toll on its traffic. The airline’s struggles are likely to persist with no certainty of the 737 MAX aircraft’s return to service.
In the first eight months of 2019, the carrier generated RPMs of 14.37 billion, down 0.8% year over year, and ASMs of 16.97 billion (down 1.7%). Load factor increased 70 bps to 84.7% during the period.
Zacks Rank & Other Key Picks
Copa Holdings sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the broader Transportation sector include Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS - Free Report) , Heartland Express, Inc. (HTLD - Free Report) and Radiant Logistics, Inc. (RLGT - Free Report) , each flaunting the same solid Zacks Rank as Copa Holdings. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Controladora Vuela, Heartland Express and Radiant Logistics have rallied more than 94%, 19% and 30% so far this year, respectively.
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