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Azul's (AZUL) Traffic & Load Factor Increase in January

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Azul S.A. (AZUL - Free Report) released strong traffic numbers for January, highlighting solid demand for its services.  Consolidated traffic (measured in revenue passenger kilometers or RPKs) rose 29.1% year over year to 3.32 billion owing to 28.3% growth on the domestic front and a 31.5% rise internationally. On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) expanded 26.5% to 3.9 billion, driven by 25.2% and 30.5% increase in domestic and international capacity, respectively.

With traffic growth outpacing capacity expansion, load factor (percentage of seats filled by passengers) improved a commendable 170 basis points (bps). While domestic load factor jumped 200 bps, international load factor climbed 70 bps.

Owing to solid air travel demand, the company has been witnessing robust rise in passenger revenues. Notably, passenger revenues, accounting for more than 90% of the top line, augmented 23.4% during the first nine months of 2019. The uptrend is likely to have continued in the fourth quarter as well, aiding the company’s overall results in turn. Detailed report will be available on Mar 12.

Shares of Azul have rallied 32.9% in a year’s time against the industry’s 0.2% decline, primarily owing to the uptick in passenger revenues. The company’s fleet modernization efforts to replace older generation aircraft with larger, more fuel-efficient planes also boosted performance.



 

Zacks Rank & Other Key Picks

Azul sports a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks in the same space are Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS - Free Report) , Delta Air Lines, Inc. (DAL - Free Report) and Ryanair Holdings plc (RYAAY - Free Report) , each carrying the same Zacks Rank as Azul. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Controladora Vuela, Delta and Ryanair have gained more than 68%, 14% and 27%, respectively, in a year.

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