Azul (AZUL Quick QuoteAZUL ) reported impressive traffic numbers for August with air-travel demand improving in Latin America. Evidently, people are increasingly opting for air travel nowadays as fears of contracting the coronavirus declined with widespread vaccination programs in places like Brazil.
Considering this upbeat scenario, it was small wonder that domestic traffic at Azul, currently carrying a Zacks Rank #3 (Hold), for the month skyrocketed 176.9% from the year-ago number. Capacity expanded 166.9% year over year in response to increasing demand. With traffic growth outweighing the capacity increase, load factor (percentage of seats filled by passengers) moved northward in the month. Evidently, this key metric inched up to 78.5% from 75.6% a year ago in the domestic markets. On the international front, load factor slipped 3 percentage points to 69.7%.
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Driven by a strong domestic market, consolidated load factor increased 2.5 percentage points to 77.9% last month. Consolidated traffic and capacity were up 173% and 164.3%, respectively. Azul’s traffic and capacity increased 6.5% and 12%, respectively, from the August 2019 numbers.
Another Brazilian carrier Gol Linhas AereasInteligentes’ (GOL Quick QuoteGOL ) August traffic surged 84.7% year over year, entirely on domestic strength as the airline did not operate regular international flights in August. We also expect the Latin American carrier Copa Holdings (CPA Quick QuoteCPA ) to deliver solid August traffic statistics on a year-over-year basis owing to air-travel demand recovery. The airline is anticipated to announce its August traffic data later in September.
Expecting air-travel demand to Latin America to pick up further in the winter, the U.S. airline heavyweight United Airlines (UAL Quick QuoteUAL ) intends to add flights to destinations in Latin America and the Caribbean region.