Copa Airlines, a business arm of Copa Holdings SA CPA, posted an increase in air traffic for the month of November, this year. Traffic – measured in revenue passenger miles (RPMs) – came in at 1.3 billion, up 2.6% from 1.27 billion recorded in Nov 2014.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) inched up 2.6% to 1.77 billion while the load factor or percentage of seats filled by passengers was 74% in Nov 2015, flat year over year.
For the first eleven months of 2015, Copa Airlines generated RPMs of 14.83 billion (up 2.4% year over year) and ASMs of 19.73 billion (up 4.6%). However, the load factor fell by 150 basis points year over year to 75.2%.
Copa Airlines continues to gain from increased flight frequencies and route expansion. Moreover, the carrier is poised to gain from the upcoming festivities which will result in a busy travel season.
However, the deteriorating Brazilian economy and the weakening of real against the strong U.S. dollar pose considerable threat to Latin American-based carriers. We believe that these headwinds will continue to defer travel plans for most passengers and will also hurt air traffic and profits for Latin American carriers.
Zacks Rank & Stocks to Consider
Copa Holdings currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space are SkyWest Inc. SKYW, Hawaiian Holdings, Inc. HA and Southwest Airlines Co. LUV. SkyWest sports a Zacks Rank #1 (Strong Buy) while the other two companies carry a Zacks Rank #2 (Buy).
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