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Azul's August Traffic Improves From July, Load Factor Slips

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With air-travel demand increasing gradually, Azul S.A. AZUL reported impressive August traffic numbers on the back of month over month double-digit rise in domestic traffic. However, consolidated load factor (% of seats filled by passengers) dropped as consolidated traffic increase was less than the capacity expansion.

Consolidated load factor fell 4.1 percentage points month over month to 75.5%. In the international front, load factor declined 8.3 percentage point to 72.7% while in the domestic front the metric dropped 3.7 percentage points to 75.7%.

Consolidated traffic (measured in revenue passenger kilometers or RPKs) surged 26.4% on a month-over-month basis. While international traffic declined 4.3%, the metric soared 29.8% on the domestic front. Consolidated capacity (measured in available seat kilometers/ASKs) jumped 33.3% owing to 36.2% domestic expansion and 6.6% international expansion from the July reading.

In August, the carrier flew more than 40% of domestic capacity compared with the same period last year. During the month Azul noticed solid improvement in both booked average fares and revenue.

 Zacks Rank & Stocks to Consider

Azul currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. KNX, Canadian Pacific Railway Limited CP and Werner Enterprises, Inc. WERN. Knight-Swift sports a Zacks Rank #1(Strong Buy), while Canadian Pacific and Werner carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, Canadian Pacific and Werner is pegged at 15%, 8% and 8.5%, respectively.

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KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report
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Werner Enterprises, Inc. (WERN) : Free Stock Analysis Report
AZUL SA (AZUL) : Free Stock Analysis Report
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