Latin American carrier Copa Holdings SA (CPA) posted impressive revenue and air traffic results for the month of Feb 2013.
Consolidated revenue passenger miles or RPMs for the month grew 17.4% from the prior-year quarter to 1,086.2 million. Although domestic revenue from passenger miles registered a 12.8% year-over-year decrease, internationally RPM improved 18.8%.
Capacity or available seat miles (ASMs) were 1,423.8 million, up 16.9% year over year, with international growth of 18.3% offsetting the 12.5% drop in the domestic arena.
Load factor on the domestic front was down 30 basis points (bps), while on the international field it registered a 30 bps growth. On a consolidated basis, load factor stood at 76.3% compared with 76.0% recorded in Feb 2012.
For the first two months of this year, on a consolidated basis, Copa generated RPMs of 2,351.4 million (up 19.5% year over year) and ASMs of 3,013.8 million (up 19.1% year over year), while load factor was 78.0%, reflecting an improvement of 30 basis points.
The passenger and cargo services provider failed to match our expectation on the earnings and sales fronts in the fourth quarter of 2012, although the results grew on a year-over-year basis. The company’s operating income also declined from the prior-year quarter’s results due to an increase in fuel charges coupled with a decline in operating revenue per available seat mile.
In the coming months, Panama-based Copa expects to benefit from the various strategic initiatives targeted to boost the profitability level. These include expanding the company’s horizon by increasing the flight frequencies, revising the fleet structure and reaching out to new destinations.
During 2013, the company is slated to add seven new The Boeing Company’s (BA) 737-800 Next Generation aircraft to its fleet. Designed with attractive and advanced Sky Interior, these new jets will bring the company’s total fleet to 90 aircraft.
Copa currently holds a Zacks Rank #3 (Hold).
Other stocks operating within the airline sector that are worth considering are Ryanair Holdings Plc (RYAAY) and SkyWest Inc. (SKYW). Both the firms currently hold a Zacks Rank #1 (Strong Buy).
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