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Copa Holdings' (CPA) May Traffic Down But Load Factor Up

Copa Holdings CPA posted mixed traffic numbers for May. Load factor (percentage of seats filled by passengers) improved even though traffic declined. This was because the extent of traffic decrease was less than the capacity contraction in the month.

Consolidated traffic (measured in revenue passenger miles or RPMs) came in at 1.8 billion, down 2.6% from the year-ago figure. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) shrank 4.6% to 2.08 billion. Consolidated load factor improved 1.8 percentage points (pp) to 86.1%.

On a year-to-date basis, Copa Holdings generated RPMs of 8.83 billion (up 0.7% year over year) and ASMs of 10.51 billion (sliding 0.5% year over year). Load factor registered a rise of 1 pp year over year to 84% as traffic expanded while capacity contracted.

Price Performance

Shares of Copa Holdings have lost 3.7% in a year’s time due to headwinds like downturn in some Latin American economies.

In fact, the company struggled on the top-line front of late, mainly due to pricing pressures. As an evidence, in the first quarter of 2019, the Latin American carrier reported lower-than-expected revenues on account of unfavorable pricing. Passenger revenues, accounting for bulk of the top line, fell 6.6%. The weakness in May traffic further augments the challenges faced by the company on the top-line front.

Zacks Rank & Key Picks

Copa Holdings carries a Zacks Rank #3 (Hold). Some better-raked stocks in the broader Transportation sector are Fly Leasing FLY, SkyWest SKYW  and GATX Corporation GATX. While Fly Leasing sports a Zacks Rank #1 (Strong Buy), SkyWest and GATX carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fly Leasing, SkyWest and GATX boast a stellar earnings history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters.

 

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