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Azul's August Traffic & Load Factor Up on Robust Travel Demand

Azul AZUL released impressive traffic numbers for August on the back of upbeat demand for air travel. Consolidated traffic (measured in revenue passenger kilometers or RPKs) increased 26.4% year over year to 2.67 billion owing to 32.3% growth on the domestic front and 11.2% rise internationally.

On a year-over-year basis, consolidated capacity (measured in available seat kilometers/ASKs) expanded 25.6% to 3.22 billion mainly due to a 30.1% rise in domestic capacity.

With traffic growth outpacing capacity expansion, load factor (percentage of seats filled by passengers) improved a 0.6 percentage points to 83%. While domestic load factor improved 1.4 percentage points to 82.6%, international load factor contracted 150 percentage points to 84.2%.

On a year-to-date basis, this Latin American carrier registered RPK of 19.31 billion (up 20.3%) and ASK of 23.12 billion (up 18%). As a result, load factor increased to 83.5% from 81.9% in the year-ago period.

Currently, Azul, which competes with the likes of Copa Holdings CPA, LATAM Airlines LTM and GOL Linhas GOL in the Latin American aviation space, carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Year to date, shares of Azul have outperformed its industry, courtesy of upbeat travel demand. The stock has appreciated 30.5% compared with its industry’s 3.8% growth.

Notably, passenger revenues, which account for the bulk of the top line at Azul, increased 15.3% and 30.5% during the first and second quarters of 2019, respectively. The uptrend is likely to continue in the remainder of 2019 owing to upbeat travel demand.

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