Copa Holdings SA’s CPA business arm Copa Airlines posted an increase in air traffic in the month of September, this year. Traffic – measured in revenue passenger miles (RPMs) – came in at 1.25 billion, up 2.3% from 1.22 billion recorded in the comparable month a year ago.
Notably, on a year-over-year basis, consolidated capacity (or available seat miles/ASMs) inched down 0.5% to 1.71 billion. However, the load factor or percentage of seats filled by passengers rose to 72.8% from 70.8% in Sep 2014.
In the first nine months of 2015, Copa Airlines generated RPMs of 12.21 billion (up 2.8% year over year) and ASMs of 16.19 billion (up 5.3%). However, the load factor fell by 180 basis points year over year to 75.4%.
Expansion of fleet size, extension of routes and increased demand for air travel are expected to propel growth for Copa Airlines even moving ahead.
However, most Latin American airlines, including Copa Airlines, continue to face the brunt of the economic downturn in Brazil and the weakening of the country’s currency real against the U.S. dollar.
Further, the 2015 projection by the International Air Transport Association (IATA) paints a gloomy picture for Latin American carriers. According to the forecast, these carriers will account for only $600 million of the $29.3 billion projected global net profit.
In stark contrast to the Latin American airlines, U.S. carriers are scaling new highs on the back of an improving labor market, consolidation and deteriorating oil prices. Since low fuel prices are resulting in massive savings for carriers, American Airlines Group Inc. AAL expects to generate savings to the tune of $4.8 billion in 2015 and Delta Air Lines, Inc. DAL looks to save over $2 billion.
Meanwhile, stiff competition from the likes of LATAM Airlines, Azul Brazilian Airlines and GOL Linhas Aereas Inteligentes S.A. GOL – which largely dominate the Brazilian aviation space – remains a concern and may further mar revenues for Copa Holdings.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment