Copa Holdings Traffic Up, Load Factor Down in September
Copa Holdings, S.A. CPA reported mixed traffic numbers for September 2018. Despite a substantial rise in traffic on the back of strong demand for air travel, load factor declined as traffic growth was outweighed by capacity expansion.
Consolidated traffic (measured in revenue passenger miles or RPMs) came in at 1.7 billion, up 6.5% from the year-ago figure. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 10.8% to 2.11 billion.
However, consolidated load factor (percentage of seats filled by passengers) contracted 330 basis points (bps) to 80.8%.
At the end of the first nine months of 2018, Copa Holdings generated RPMs of 16.19 billion (up 9.2% year over year) and ASMs of 19.37 billion (up 8.7% year over year). As a result, load factor registered a rise of 40 bps year over year to 83.6%.
Copa Holdings is expected to release third-quarter financial numbers on Nov 14. Similar to other airline companies, Copa Holdings has been struggling from the surge in oil prices. The health of airline stocks is inversely proportional to rise in oil prices. This is because fuel costs represent a major chunk of airline expenditures. Thus the spike in oil price, resulting in significant increase in operating expenses, is likely to hamper the company’s bottom-line growth in the third quarter.
Other players in the broader Transportation sector such as Southwest Airlines Co. LUV, SkyWest, Inc. SKYW and Kansas City Southern KSU will release earnings results on Oct 25, Oct 30 and Oct 19, respectively.
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