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Azul's (AZUL) December Traffic Declines From 2019 Levels

·3-min read

Azul AZUL reported a 1.9% decline in traffic (on a consolidated basis) for the month of December 2021 from the levels achieved in December 2019 (pre-coronavirus). The decline was mainly due to weakness on the international front. Consolidated load factor (% of seats filled by passengers) dipped 0.6 percentage points (p.p) to 82.9% last month with the capacity decline (1.2%) being less than the reduction in traffic.

International traffic in December declined a massive 60.9% from the comparable period’s level in 2019. This highlights the fact that despite vaccinations, air-travel demand on the international front still lags the pre-coronavirus levels significantly. With fewer flights operating internationally, capacity plunged 61.6%. With the extent of capacity decline surpassing the traffic fall, international load factor increased 1.5 p.p to 88.4% in December 2021.

However, the scenario was much brighter on the domestic front with traffic increasing 20.9% from the December 2019 levels. Capacity also expanded by the same percentage. As a result, load factor remained flat at 82.3%. With increased vaccination programs in Brazil, air-travel demand looks impressive as highlighted by the double digit percentage rise in December 2021 from the pre-coronavirus levels.

Zacks Rank & Key Picks

Azul currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are as follows:

Expeditors International of Washington EXPD currently sports a Zacks Rank #1 (Strong Buy). EXPD is being bolstered by upbeat airfreight revenues. Like the first three quarters of 2021, we expect airfreight revenues to aid Expeditors’ fourth-quarter 2021 results (scheduled to be out on Feb 22, 2022) as well.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Expeditors have surged 32% in a year’s time. In May 2021, Expeditors announced an 11.5% hike in its semi-annual cash dividend, taking the total to 58 cents per share. EXPD has an impressive record with respect to utilizing its shareholders’ money. The optimism surrounding the stock is evident from the 7.3% northbound revision of the Zacks Consensus Estimate for the current-year earnings over the past 60 days.

ArcBest Corporation ARCB currently carries a Zacks Rank #2 (Buy). ARCB has a stellar surprise history. Its earnings outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 27.4%.

Shares of ArcBest have surged more than 100% in a year’s time. Improving freight conditions in the United States bode well for ARCB. Solid customer demand and higher market rates are supporting growth at ARCB.

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