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Azul's (AZUL) July Traffic Results Increase From June Levels

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Azul S.A. AZUL posted impressive traffic numbers for July compared with June levels, as air-travel demand picks up on increased inoculation programs.
Consolidated traffic, measured in revenue passenger kilometers, increased 30.4% month over month. With travel demand rising, the company expanded capacity significantly. Capacity measured in available seat kilometers moved up 21.6% in July from June levels. Since traffic surge was more than capacity expansion, load factor (% of seats filled by passengers) rose to 82.3% in July from 76.8% in June.

On a year-over-year basis, the scenario was rosier with consolidated traffic surging 253%.  In the same time frame, capacity expanded 241%. Load factor increased 2.8 percentage points (p.p) to 82.3%.

On the domestic front, traffic and capacity increased 268.6% and 252.7%, respectively, from the year-ago period’s levels. Consequently, load factor increased 3.6 p.p to 83% in July. Internationally, traffic and capacity surged 110.8% and 132.5%, respectively, in the same time frame. However, internationally load factor dropped 7.6 p.p to 73.4%.

Compared with July 2019 (pre-COVID) levels, both traffic and capacity (consolidated) plunged 20.9% and 16.8%, respectively. Load factor also tanked 4.3 p.p to 86.6% as decline in traffic was more than capacity contraction.

Zacks Rank & Stocks to Consider

Azul currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. KNX, Landstar System, Inc. LSTR and Herc Holdings Inc. HRI. Knight-Swift and Landstar carry a Zacks Rank #2 (Buy), while Herc Holdings sports a Zacks Rank #1 (Strong 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, Landstar and Herc Holdings is pegged at 15%, 12% and 49.2%, respectively.
 


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AZUL SA (AZUL) : Free Stock Analysis Report
 
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