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Azul's Load Factor in June Rises for the 5th Successive Time

Zacks Equity Research

Azul S.A. AZUL released strong traffic numbers for June 2019. Consolidated traffic (measured in revenue passenger kilometers or RPKs) increased 21.6% year over year to 2.36 billion owing to 28.7% growth on the domestic front and 4.6% rise, internationally. On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) expanded 14.7% to 2.83 billion, driven by 20.3% increase in domestic capacity.

With traffic growth outpacing capacity expansion, load factor (percentage of seats filled by passengers) improved a commendable 480 basis points (bps). While domestic load factor jumped 540 bps, international load factor climbed 390 bps.

On a year-to-date basis, the carrier registered RPK of 13.67 billion (up 18.4%) and ASK of 16.47 billion (up 15.8%). Consequently, load factor inched up to 83% from 81.2% in the year-ago period.

The solid traffic statistics are indicative of the spurt in demand for Azul’s services. With a steady ascent in passenger traffic, the carrier has reported increase in load factor (a key measure of airline efficiency) for five consecutive months this year. Evidently, surging traffic led to a 15.3% expansion in passenger revenues during the first quarter of 2019. With demand remaining strong, the uptrend is anticipated to continue through 2019. This, in turn, should drive the company’s overall growth.

AZUL SA Price

AZUL SA Price

AZUL SA price | AZUL SA Quote


Zacks Rank & Other Key Picks

Azul carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the same space include Air China Ltd. AIRYY, Copa Holdings, S.A. CPA and Gol Linhas Aereas Inteligentes S.A. GOL. While Air China sports a Zacks Rank #1 (Strong Buy), Copa Holdings and Gol Linhas carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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