Copa Holdings' (CPA) October Traffic Falls 25.4% From 2019 Level

Copa Holdings’ CPA traffic, measured in revenue passenger miles (RPMs), declined 25.4% to 1.28 billion in October 2021 from the comparable period in 2019. The downside was primarily due to the coronavirus-induced lower air-travel demand from the pre-pandemic levels (2019).

Thanks to the tepid demand, capacity — measured in available seat miles (ASMs) — fell 22.8% from the 2019 level to 1.57 billion. With traffic declining more than the amount of capacity contraction, load factor (percentage of seats filled with passengers) deteriorated 290 basis points to 82% in October.

The picture appears rosier on a month-over-month basis. Backed by increased inoculation programs, air-travel demand is continuously improving. The Panama-based carriers’ October traffic statistics represents an increase of 9.6 on a month-over-month basis. Meanwhile, capacity climbed 6.2% month over month. Since traffic expansion outweighed capacity growth, load factor improved 250 basis points in October from the September-level.

 

The gradually improving traffic scenario is likely to have driven Copa Holdings’ third-quarter 2021 results. CPA, which currently carries a Zacks Rank #3 (Hold), will release its third-quarter results on Nov 17.

In fact, the gradually improving traffic scenario in Latin America has aided the third-quarter results of Latin carriers, Gol Linhas Aereas Inteligentes GOL and Azul AZUL. While Gol released third-quarter results on Nov 9, Azul divulged the quarterly numbers on Nov 11. Let’s recap the third-quarter results of the two carriers.

Gol Linhas, which currently has a Zacks Rank #4 (Sell), incurred a loss (excluding $1.59 from non-recurring items) of 85 cents per share in the third quarter of 2021, in line with the Zacks Consensus Estimate. The amount of loss narrowed year over year.

Net operating revenues of $366.4 million surpassed the Zacks Consensus Estimate of $334.2 million. The top line at Gol Linhas surged significantly year over year, with passenger revenues (accounting for 92.3% of total revenues) rising more than 100%, owing to continued recovery in air-travel demand in Brazil as vaccination rates increase. Gol transported 4.9 million passengers in the third quarter, up 91.7% from the year-ago period.

Azul, currently carrying a Zacks Rank #4, incurred a loss (excluding $2.09 from non-recurring items) of $1.08 per share in the third quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.35. The amount of loss also narrowed year over year.

Total revenues of $520 million outperformed the Zacks Consensus Estimate of $457.9 million and increased year over year (up 59.6% sequentially) as air-travel demand improves, courtesy of widespread vaccination programs in Brazil. With more and more people taking to the skies, Azul’s passenger revenues, accounting for 88.3% of the top line, surged 69.3% from the second quarter of 2021.

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Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
 
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