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

Zacks Equity Research

Azul S.A. AZUL released strong traffic numbers for December 2019. Consolidated traffic (measured in revenue passenger kilometers or RPKs) increased 27.2% year over year to 2.96 billion owing to 25.7% growth on the domestic front and 31.1% rise, internationally. On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) expanded 26.5% to 3.54 billion, driven by 24.3% expansion in domestic capacity and a 32.8% increase in international capacity.

With traffic growth outpacing capacity expansion, load factor (percentage of seats filled by passengers) improved 50 basis points (bps). While domestic load factor jumped 100 bps, international load factor dipped 110 bps.

For 2019, the carrier registered RPK of 29.94 billion (up 23.9%) and ASK of 35.87 billion (up 22.2%). Consequently, load factor inched up to 83.5% from 82.3% in the year-ago period.

Price Performance

Shares of Azul have rallied more than 45% in a year’s time, outperforming the industry’s 12.4% rise. The upside is primarily owing to an uptick in passenger revenues (up 23.4% during the first nine months of 2019), courtesy of solid air travel demand. Its fleet modernization efforts also contributed to such impressive price performance.



 

Zacks Rank & Key Picks

Azul carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are Delta Air Lines, Inc. DAL, SkyWest, Inc. SKYW and Air Lease Corporation AL, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Delta, SkyWest and Air Lease have rallied more than 21%, 36% and 34%, respectively, in a year’s time.

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