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Azul's March Traffic & Load Factor Up on High Travel Demand

Zacks Equity Research

Azul S.A. AZUL released impressive traffic numbers for March 2019. Load factor (percentage of seats filled by passengers) in the month improved as traffic growth outpaced capacity expansion.

Consolidated traffic (measured in revenue passenger kilometers or RPKs) improved 15.6% year over year to 2.17 billion owing to 20.1% growth on the domestic front and a 2.7% rise on the international front. On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) expanded 15.3% to 2.68 billion, driven by 17.5% rise in domestic capacity and 8.5% growth in international capacity.

Notably, consolidated load factor expanded 20 basis points to 80.8%. Also, load factor on the domestic front inched up to 81% from 79.2% in the prior-year period. However, load factor on the international front slipped to 80.2% from 84.7% a year ago.

Solid demand for air travel has led to the company’s encouraging traffic report. Notably, passenger revenues were up 17.9% on a year-over-year basis during 2018 owing to robust travel demand. Higher passenger revenues will continue to boost the carrier’s top line.

AZUL SA Price

AZUL SA Price | AZUL SA Quote

Zacks Rank & Other Key Picks

Azul carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader Transportation sector are Avianca Holdings S.A. AVH, SkyWest, Inc. SKYW and Swire Pacific Ltd. SWRAY, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Avianca, SkyWest and Swire Pacific have rallied more than 4%, 28% and 22%, respectively, on a year-to-date basis.

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